The Technical Breakout Setups screen combines two measurements to answer a familiar technical trading question: which stocks are strong enough to buy, and when does the chart offer a controlled entry? The first filter requires a ChartMill Technical Rating of at least 7, which is meant to identify stocks in a solid uptrend with favorable relative strength. The second filter requires a Setup Quality Rating of at least 7, which looks for the kind of consolidation that can produce a clean breakout trigger. One name that currently clears both hurdles is CROWN HOLDINGS INC (NYSE:CCK), a packaging company with a 9 out of 10 technical rating and an 8 out of 10 setup rating.
Technical strength comes first
For a breakout setup to matter, the underlying trend needs to be sound. A stock can be consolidating for a long time, but if the larger trend is down, the odds favor a failed break rather than a continuation. Crown Holdings avoids that problem. The ChartMill technical report rates the stock 9 out of 10, and both its long-term and short-term trends are positive. The moving averages used in the model, including the 20, 50, 100 and 200-day SMAs, are all rising. That combination generally points to a stock in a controlled uptrend rather than a sharp, unsustainable spike.
Investors who want to see the full technical breakdown can open the technical analysis report.
The report highlights several confirming details:
- Technical rating: 9 out of 10
- Trend structure: long-term and short-term trends are positive, with rising 20, 50, 100 and 200-day moving averages
- Relative strength: outperforms 73% of stocks in the Containers & Packaging industry and 82% of all stocks over the trailing year
- Price position: trading near the upper end of its 52-week range, which runs from 89.21 to 122.91
- Volatility and liquidity: ATR of 2.82 points, or 2.47%, with average daily volume of about 1.09 million shares
These metrics matter because the technical rating is not just a momentum reading. It incorporates relative strength, the shape of the trend and the stock’s position within the broader market. That makes it a practical way to focus on stocks that are leading their industry instead of simply bouncing off lows.
One caveat from the report is that while the stock is in the upper part of its 52-week range, the S&P 500 is near a new high, so Crown Holdings is slightly lagging the broader market. The monthly and 12-month returns remain positive, but that lag suggests the breakout attempt may need extra confirmation.
Setup quality turns a strong stock into a tradeable pattern
Technical strength alone does not tell you when to buy. A stock that has already moved 20% can still have a high technical rating, but the risk/reward of chasing it may be poor. The Setup Quality Rating is designed to address that timing problem. Crown Holdings scores 8 out of 10, which reflects a period of consolidation near recent highs.
The report notes that the stock has been trading in a 114.72 to 122.91 range over the past month and is currently in the middle of that range, where prices have been basing. That type of behavior often sets up a breakout: the stock builds a support zone below and a resistance zone above, and a move through resistance can trigger fresh buying.
The report also provides concrete levels for a potential setup:
- Proposed entry: a buy stop at 122.15, just above the resistance zone from 120.69 to 122.14
- Suggested stop: 118.25, below the support zone from 118.26 to 119.31
- Worst-case risk: 3.19% on the trade, or 3.90 points per share
The setup quality score also accounts for whether prices are close enough to short-term moving averages, whether a support zone exists below, and whether volatility is compressing. A high score does not guarantee a breakout; it simply means the chart has a logical place to put an entry and a stop. That is why the strategy combines it with the technical rating rather than using either score alone.
There are limitations to keep in mind. The report notes that volume has been lower in the last few days, so traders should look for an expansion in volume on any move through resistance. The setup is also generated automatically and should be checked against upcoming earnings or company news before placing an order.
Why the two readings work together
A breakout screen that only looked at technical strength would keep investors in strong stocks but often at poor entry points. A screen that only looked for consolidation would find quiet charts without knowing whether the stock was coiling inside a downtrend. By requiring both a high technical rating and a high setup rating, the Technical Breakout Setups screen tries to isolate stocks where the trend is already working and the consolidation provides a favorable risk/reward setup. Crown Holdings fits that profile.
Where to find more breakout candidates
Traders who want to see which stocks currently pass the same filters can browse the latest breakout opportunities in the Technical Breakout Setups screen. The screen can be adjusted by market, price, volume and other preferences, making it a practical starting point for building a daily watchlist around this methodology.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. Always conduct your own research and consider your risk tolerance before making investment decisions.
Read full article here »
View the Zacks #1 Rank List
Crown Holdings (NYSE:CCK) Flashes a Breakout Setup with Strong Technical Strength
The Technical Breakout Setups screen combines two measurements to answer a familiar technical trading question: which stocks are strong enough to buy, and when does the chart offer a controlled entry? The first filter requires a ChartMill Technical Rating of at least 7, which is meant to identify stocks in a solid uptrend with favorable relative strength. The second filter requires a Setup Quality Rating of at least 7, which looks for the kind of consolidation that can produce a clean breakout trigger. One name that currently clears both hurdles is CROWN HOLDINGS INC (NYSE:CCK), a packaging company with a 9 out of 10 technical rating and an 8 out of 10 setup rating.
Technical strength comes first
For a breakout setup to matter, the underlying trend needs to be sound. A stock can be consolidating for a long time, but if the larger trend is down, the odds favor a failed break rather than a continuation. Crown Holdings avoids that problem. The ChartMill technical report rates the stock 9 out of 10, and both its long-term and short-term trends are positive. The moving averages used in the model, including the 20, 50, 100 and 200-day SMAs, are all rising. That combination generally points to a stock in a controlled uptrend rather than a sharp, unsustainable spike.
Investors who want to see the full technical breakdown can open the technical analysis report.
The report highlights several confirming details:
These metrics matter because the technical rating is not just a momentum reading. It incorporates relative strength, the shape of the trend and the stock’s position within the broader market. That makes it a practical way to focus on stocks that are leading their industry instead of simply bouncing off lows.
One caveat from the report is that while the stock is in the upper part of its 52-week range, the S&P 500 is near a new high, so Crown Holdings is slightly lagging the broader market. The monthly and 12-month returns remain positive, but that lag suggests the breakout attempt may need extra confirmation.
Setup quality turns a strong stock into a tradeable pattern
Technical strength alone does not tell you when to buy. A stock that has already moved 20% can still have a high technical rating, but the risk/reward of chasing it may be poor. The Setup Quality Rating is designed to address that timing problem. Crown Holdings scores 8 out of 10, which reflects a period of consolidation near recent highs.
The report notes that the stock has been trading in a 114.72 to 122.91 range over the past month and is currently in the middle of that range, where prices have been basing. That type of behavior often sets up a breakout: the stock builds a support zone below and a resistance zone above, and a move through resistance can trigger fresh buying.
The report also provides concrete levels for a potential setup:
The setup quality score also accounts for whether prices are close enough to short-term moving averages, whether a support zone exists below, and whether volatility is compressing. A high score does not guarantee a breakout; it simply means the chart has a logical place to put an entry and a stop. That is why the strategy combines it with the technical rating rather than using either score alone.
There are limitations to keep in mind. The report notes that volume has been lower in the last few days, so traders should look for an expansion in volume on any move through resistance. The setup is also generated automatically and should be checked against upcoming earnings or company news before placing an order.
Why the two readings work together
A breakout screen that only looked at technical strength would keep investors in strong stocks but often at poor entry points. A screen that only looked for consolidation would find quiet charts without knowing whether the stock was coiling inside a downtrend. By requiring both a high technical rating and a high setup rating, the Technical Breakout Setups screen tries to isolate stocks where the trend is already working and the consolidation provides a favorable risk/reward setup. Crown Holdings fits that profile.
Where to find more breakout candidates
Traders who want to see which stocks currently pass the same filters can browse the latest breakout opportunities in the Technical Breakout Setups screen. The screen can be adjusted by market, price, volume and other preferences, making it a practical starting point for building a daily watchlist around this methodology.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. Always conduct your own research and consider your risk tolerance before making investment decisions.
Read full article here »