As June nears, investors may benefit from taking a more active approach to stock selection by identifying potential breakout opportunities within established price ranges. Under this strategy, a stock should be sold if it falls below the lower support level, while a breakout above the upper resistance level signals an opportunity to stay invested and capitalize on further upside momentum.
Applying this strategy, Materialise NV MTLS, Luxfer Holdings PLC LXFR and Arko Corp. ARKO emerged as notable breakout stocks for June 2026. Over the past year, shares of Materialise, Luxfer and Arko have climbed 20.3%, 49.7% and 83%, respectively.
Spotting Breakout Stocks Before the Next Big Rally
To pick a breakout stock, calculate support and resistance levels. A support level is the lower bound for stock movements, while a resistance level refers to the maximum price it trades at within a considerable period.
In other words, the demand for a stock is lowest at its support level, meaning most traders are willing to sell it. The majority of traders are willing to go long the stock at the resistance level, indicating that they would like to add it to their portfolios. The key to identifying breakout stocks is to zero in on those on the verge of a breakout or those that have just broken above resistance.
Has a True Breakout Taken Place
The primary risk associated with such a strategy is that the decision to buy an apparent breakout candidate has been incorrectly timed. When a stock moves above the resistance level, it should be highly prized by traders. However, whether such a breakout is genuine is another matter altogether.
For a bona fide breakout, the stock’s earlier resistance should become its new support. This only happens if the established trading channel is tested by observing long-term price trends. The strength of the support and resistance levels can be ascertained only through such a study. Despite the risk of misidentification, correctly identifying such stocks can yield considerable returns, even at a price that may not seem attractive at first glance.
Screening Criteria Using Research Wizard:
• Percentage price change over four weeks between 10% and 20% (Stocks showing considerable price increases but whose gains are not excessive)
• Current Price /52-Week High greater than or equal to 0.9 (Stocks trading 90% close to their 52-week highs.)
• Zacks Rank less than or equal to #2 (Only Strong Buy and Buy-rated stocks can get through.)
Regardless of market strength, stocks with a Zacks Rank #1 (Strong Buy) or 2 (Buy) have a proven track record of outperforming the market. You can see the complete list of today’s Zacks #1 Rank stocks here.
• Beta for 60 months less than or equal to 2
(Stocks that move more than the broader market but within a reasonable limit.)
• Current price less than or equal to $20 (Stocks reasonably priced)
These criteria narrow the universe of more than 6,853 stocks to only 12.
Here are the top three stocks:
Materialise
Materialise provides additive manufacturing software, medical solutions and 3D printing services across global markets. Currently, Materialise has a Zacks Rank #2. MTLS’ expected earnings growth rate for the current year is 6.7%.
Luxfer
Luxfer manufactures high-performance materials, components and gas containment solutions. Luxfer currently sports a Zacks Rank #1. Its expected earnings growth rate for the current year is 8.1%.
Arko
Arko runs a network of convenience stores across the United States. Arko has a Zacks Rank #1 at present. ARKO’s expected earnings growth rate for the current year is 93.3%.
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Luxfer Holdings PLC (LXFR): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).