Last Updated on Aug 13, 2024 by Anjali Chourasiya
When you are navigating the world of stock trading, you may often come across terms like “breakout stocks” and “high volume.” These concepts are integral to understanding how the market operates and identifying potential opportunities. Breakout stocks, also known as stocks near breakout, are a specific category of stocks that experience a significant price movement after breaking through a certain price level or trading range. Due to their potential to yield significant profits within a short timeframe, these stocks capture the interest of traders and investors. In this article, let’s look at the top breakout stocks with high volume near their 52-week high and low, along with deeply exploring the concept of breakout stocks, key indicators, strategies, and common pitfalls.
Table of Contents
Breakout Stocks With High Volume
| Name | Sub-Sector | Market Cap (Rs. in cr.) | Close Price (Rs.) | PE Ratio | % Away From 52W Low | % Away From 52W High | Daily Volume |
| B L Kashyap and Sons Ltd | Construction & Engineering | 2,569.79 | 113.99 | 48.93 | 171.40 | 2.99 | 2,365,554.00 |
| Jubilant Pharmova Ltd | Pharmaceuticals | 13,482.77 | 851.45 | 174.87 | 167.12 | 2.98 | 540,413.00 |
| Kaveri Seed Company Ltd | Seeds | 5,874.90 | 1,148.85 | 19.66 | 114.74 | 2.71 | 639,722.00 |
| Kandarp Digi Smart Bpo Ltd | Outsourced services | 38.40 | 42.80 | 38.40 | 180.66 | 2.57 | 232,000.00 |
| VL E-Governance & IT Solutions Ltd | IT Services & Consulting | 1,134.00 | 101.94 | -6.67 | 254.57 | 2.33 | 7,137,161.00 |
| Airan Ltd | IT Services & Consulting | 554.46 | 44.35 | 44.18 | 125.13 | 2.30 | 9,897,465.00 |
| Oil India Ltd | Oil & Gas – Exploration & Production | 108,535.40 | 667.25 | 17.13 | 270.01 | 2.21 | 13,007,276.00 |
| Deepak Fertilisers and Petrochemicals Corp Ltd | Fertilisers & Agro Chemicals | 12,799.25 | 1,013.90 | 28.92 | 125.31 | 2.19 | 1,566,336.00 |
| Inox Green Energy Services Ltd | Heavy Electrical Equipments | 5,541.23 | 188.73 | 198.54 | 212.47 | 2.16 | 22,203,460.00 |
| EIH Associated Hotels Ltd | Hotels, Resorts & Cruise Lines | 3,012.39 | 494.35 | 37.18 | 138.93 | 2.15 | 1,365,812.00 |
Note: The stocks are filtered using Tickertape Stock Screener on 12th August 2024. Below-mentioned filters are used to get the list of breakout stocks with high volume.
- Close Price: Above 10 – Set the lower limit to 10
- % Away from 52-Week High: Set to Near 52WH – Sort from highest to lowest
- % Away from 52-Week Low: Set the lower limit to 100
- Daily Volume: Set to High
Note that these stocks are in no order of preference. Please note that these stock selection criteria and the stocks are provided for informational purposes only; it is essential to conduct your own research.
🚀 Pro Tip: Use Tickertape’s Portfolio Analysis to assess your investment portfolio’s diversification and performance.
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Details of the Breakout Stocks With High Volume
B L Kashyap and Sons Ltd
B L Kashyap and Sons Ltd is a well-known construction and engineering company in India, established in 1989. The company has played a significant role in infrastructure development across the country, delivering projects in various sectors such as real estate, IT parks, commercial spaces, and more. B L Kashyap is recognised for its commitment to quality and timely project execution.
The company has a market capitalisation of Rs. 2,569.79 cr. The stock is trading 171.40% above its 52-week low and is just 2.99% below its 52-week high. The PE ratio stands at 48.93, and it has a daily trading volume of 23,65,554 shares.
Jubilant Pharmova Ltd
Jubilant Pharmova Ltd is a leading pharmaceutical company in India, part of the Jubilant Bhartia Group, which was founded by Shyam S. Bhartia and Hari S. Bhartia. The company operates in multiple segments, including pharmaceuticals, life sciences ingredients, and drug discovery solutions. Jubilant Pharmova is known for its integrated and innovation-driven approach.
The company has a market capitalisation of Rs. 13,482.77 cr. It is trading 167.12% above its 52-week low and 2.98% below its 52-week high. The PE ratio is quite high at 174.87, indicating strong growth expectations. The daily trading volume is 5,40,413 shares.
Kaveri Seed Company Ltd
Kaveri Seed Company Ltd, founded in 1976, is one of India’s leading seed companies, specialising in hybrid seeds for crops such as corn, cotton, and vegetables. The company has made significant contributions to the agricultural sector by enhancing crop productivity and providing high-quality seeds to farmers across the country.
The company’s market capitalisation is Rs. 5,874.90 cr. It is trading 114.74% above its 52-week low and 2.71% below its 52-week high, with a PE ratio of 19.66. The daily trading volume is 6,39,722 shares.
Kandarp Digi Smart Bpo Ltd
Kandarp Digi Smart Bpo Ltd is a relatively small player in the outsourced services sector. The company focuses on providing business process outsourcing services, leveraging digital technologies to improve efficiency and service quality.
The market capitalisation stands at Rs. 38.40 cr. The stock is trading 180.66% above its 52-week low and 2.57% below its 52-week high, with a PE ratio of 38.40. The daily trading volume is 2,32,000 shares.
VL E-Governance & IT Solutions Ltd
VL E-Governance & IT Solutions Ltd operates in the IT services and consulting sector, offering a range of solutions related to e-governance and digital transformation. The company plays a crucial role in enabling government services to be delivered digitally to citizens.
The company has a market capitalisation of Rs. 1,134.00 cr. It is trading 254.57% above its 52-week low and 2.33% below its 52-week high. The PE ratio is -6.67, indicating that the company may have been reporting losses recently. The daily trading volume is 71,37,161 shares.
Airan Ltd
Airan Ltd is an IT services and consulting firm that specialises in providing technology solutions to businesses. The company offers a variety of services, including software development, IT consulting, and digital transformation initiatives.
The market capitalisation of Airan Ltd is Rs. 554.46 cr. The stock is trading 125.13% above its 52-week low and 2.30% below its 52-week high. The PE ratio is 44.18, and the daily trading volume is 98,97,465 shares.
Oil India Ltd
Oil India Ltd, established in 1959, is the second-largest government-owned oil exploration and production company in India. It is a major player in the oil and gas sector, involved in the exploration, production, and transportation of crude oil and natural gas.
The company has a substantial market capitalisation of Rs. 1,08,535.40 cr. The stock is trading 270.01% above its 52-week low and 2.21% below its 52-week high, with a PE ratio of 17.13. The daily trading volume is 1,30,07,276 shares.
Deepak Fertilisers and Petrochemicals Corp Ltd
Deepak Fertilisers and Petrochemicals Corp Ltd, founded in 1979, is a leading producer of fertilisers and industrial chemicals in India. The company’s diverse portfolio includes fertilisers, industrial chemicals, and technical ammonium nitrate, which is used in mining and infrastructure projects.
The company’s market capitalisation is Rs. 12,799.25 cr.It is trading 125.31% above its 52-week low and 2.19% below its 52-week high. The PE ratio is 28.92, with a daily trading volume of 15,66,336 shares.
Inox Green Energy Services Ltd
Inox Green Energy Services Ltd is a part of the Inox Group and operates in the renewable energy sector, providing operation and maintenance services for wind power projects. The company plays a crucial role in supporting India’s green energy initiatives.
The market capitalisation of the company is Rs. 5,541.23 cr. It is trading 212.47% above its 52-week low and 2.16% below its 52-week high. The PE ratio is quite high at 198.54, reflecting significant growth potential. The daily trading volume is 2,22,03,460 shares.
EIH Associated Hotels Ltd
EIH Associated Hotels Ltd, a subsidiary of the Oberoi Group, operates a chain of luxury hotels and resorts across India. The company is known for its premium hospitality services and has been a significant player in the Indian hotel industry for decades.
The market capitalisation of EIH Associated Hotels Ltd is Rs. 3,012.39 cr. The stock is trading 138.93% above its 52-week low and 2.15% below its 52-week high, with a PE ratio of 37.18. The daily trading volume is 13,65,812 shares.
What Are Breakout Stocks?
Before we jump to understanding the meaning of breakout stocks, let us grasp the meaning of breakout.
What Is a Breakout in the Stock Market?
A breakout in the stock market occurs when the price of a stock moves above a resistance level or below a support level. Resistance levels are price points where a stock has historically faced selling pressure, preventing it from moving higher. It’s like a ceiling that the stock has repeatedly hit but hasn’t been able to break through. On the other hand, support levels act like a floor, where buying pressure has been strong enough to keep the stock from falling further.
When a stock’s price breaks above the resistance level, it might signal that the stock is gaining momentum, and traders might anticipate further upward movement. Similarly, when a stock breaks below a support level, it could indicate the potential for further decline. Breakouts can be identified using various technical indicators and tools, which helps traders spot these critical levels across multiple stocks.
Understanding Breakout Stocks
Now that you have an understanding of what a breakout is, let’s delve into breakout stocks. Breakout stocks are those that have recently moved beyond a critical price level, such as a resistance or support level, which might indicate the start of a new trend. For example, breakout stocks for tomorrow might include those that have just surpassed a key resistance level, suggesting the possibility of continued upward movement.
It’s important to remember that breakout stocks can involve both upward and downward movements. In some cases, a stock might break below a support level, which is referred to as a negative breakout. This kind of breakout might signal a potential downtrend. Traders often seek positive breakout stocks or bullish stocks for tomorrow, focusing on those that are expected to rise following a breakout. However, negative breakouts are also significant and may be of interest depending on a trader’s strategy.
Breakout stocks can offer potential opportunities, but they also come with risks. A breakout might not always lead to a sustained trend, and false breakouts can occur, where the price quickly reverses after briefly moving beyond a resistance or support level. This is why traders carefully analyse breakout stocks and use various tools, like a breakout stock screener, to identify potential candidates.
The Importance of High Volume in Breakouts
Volume plays a critical role in assessing the strength of a breakout. Volume measures the number of shares traded. When you observe a breakout occurring on low volume, it may be a sign that the move is not supported by significant buying or selling interest, which could result in a false breakout. Conversely, a breakout stock with high volume is often seen as more reliable, as it indicates strong participation from market participants.
Visual examples of high-volume breakouts can help clarify this concept. Imagine a stock trading within a tight range for several weeks, then suddenly breaking out with a sharp increase in volume. This scenario suggests the market has noticed the stock, and the price may continue to rise, supported by the strong volume. This confirmation is vital for traders looking to capitalise on breakouts while minimising the risk of false signals.
Key Indicators for Identifying Breakout Stocks
To spot breakout stocks effectively, traders use several key technical indicators that signal when a breakout might occur:
Moving Averages
Moving averages, such as the 50-day and 200-day averages, smooth out price data to reveal trends. A breakout occurs when a stock’s price crosses above or below these averages. For example, a stock breaking above its 50-day moving average with high volume can indicate the start of a bullish trend. Conversely, a break below the 200-day moving average might signal a bearish breakout.
Relative Strength Index (RSI)
RSI measures the speed and change of price movements, indicating whether a stock is overbought or oversold. An RSI above 70 signals overbought conditions, which can precede a bullish breakout, while an RSI below 30 indicates oversold conditions, possibly leading to a bearish breakout. Divergences between RSI and price action can help anticipate breakouts.
Bollinger Bands
Bollinger Bands measure a stock’s volatility and potential breakout points. These bands, plotted above and below a moving average, tighten during low volatility, signalling a potential breakout. A breakout is often confirmed when the stock price moves outside the bands on high volume, indicating a new trend.
Volume Oscillators
Volume oscillators like the On-Balance Volume (OBV) and Chaikin Money Flow (CMF) help confirm breakout strength. A rising OBV during a breakout suggests strong accumulation, while a positive CMF indicates money flowing into the stock, both of which support the breakout’s credibility.
By combining these indicators with volume analysis, you can more effectively identify and confirm breakout stocks.
Strategies for Trading Breakout Stocks With High Volume
Trading breakout stocks with high volume can be a highly effective strategy if executed properly. To help you navigate this approach, let’s break down the process into three essential areas: pre-breakout setup, entry and exit points, and risk management.
Pre-Breakout Setup
Identifying stocks near a breakout is the first step in this strategy. You can use tools like a technical breakout stock screener to find stocks approaching key resistance or support levels. Technical indicators such as moving averages, RSI, and Bollinger Bands can also help identify potential breakout stocks. Additionally, tracking low price high volume stocks may alert you to stocks that are gaining momentum before they break out.
Setting up alerts is another crucial component of the pre-breakout setup. Most trading platforms allow you to set price alerts for stocks near breakout levels. Volume alerts are equally important as they notify you of sudden spikes in trading activity, which often precede a breakout. By being prepared, you can act quickly when stocks near breakout levels show signs of making a move.
Entry and Exit Points
Once a breakout is confirmed by high volume, determining the optimal entry point becomes essential. The entry point is typically when a stock moves beyond a key price level, such as a resistance or support level.
To manage your risk, it can be helpful to set a point where you’re willing to sell if things don’t go as planned. This is where the concept of stop-loss comes into play. A stop-loss is a predetermined price at which you decide to sell a stock to prevent further losses. This can be helpful in managing risk, especially if the stock’s movement doesn’t go as expected.
As for when to sell, you might watch how the stock is behaving. You can monitor the stock’s price and volume closely. This is where you must understand the concept of exit point. Exit points come into play when you’re considering selling a stock after it has moved in your favour. Keeping an eye on the stock’s behaviour, including any changes in price or trading activity, can provide clues about when it might be time to sell.
Risk Management
Risk management is crucial when trading breakout stocks with high volume, given the inherent volatility in these trades. One key aspect is proper position sizing. You may want to risk only a small percentage (e.g., 1-2%) of your total capital on any single trade to ensure that no single loss can significantly impact your overall portfolio.
Portfolio diversification is another essential element of risk management. Instead of concentrating all your capital on one or two breakout stocks for tomorrow, consider spreading your investments across multiple stocks or sectors. This diversification can help mitigate risk by reducing the impact of any one trade that goes against you.
Successful risk management often involves disciplined adherence to stop-loss levels and position sizing. Traders who focus on managing their risks are more likely to achieve long-term success, even if some trades do not turn out as expected.
Common Pitfalls in Trading Breakout Stocks
Trading breakout stocks with high volume can be profitable, but it’s important to avoid common pitfalls. One of the most frequent mistakes is chasing a breakout too late. Entering a trade after the stock has already moved significantly can reduce your profit potential and increase the risk of a pullback. To avoid this, one might aim to enter at an early stage of the breakout with strong volume confirmation.
False breakouts are another significant risk. These occur when a stock briefly moves beyond a resistance or support level but quickly reverses. To minimise the chances of getting caught in a false breakout, wait for confirmation through high volume, and consider starting with a smaller position to test the breakout’s validity.
Emotional trading is another common challenge. The excitement of a potential big win can lead to impulsive decisions, such as entering trades without proper analysis or holding onto losing positions too long. It is important to stick to a trading plan with predefined rules for entry, exit, and stop-loss levels to manage these emotions effectively.
To Conclude
Trading breakout stocks with high volume offers the potential for significant profits, but it requires careful planning and disciplined execution. By focusing on pre-breakout setups, timing your entry and exit points carefully, and employing solid risk management strategies, you can increase your chances of success. However, it’s equally important to avoid common pitfalls, such as chasing late breakouts, falling for false breakouts, and letting emotions dictate your trading decisions. With the right strategies and mindset, you can navigate the complexities of breakout trading and work towards achieving your financial goals.
FAQs About Breakout Stocks With High Volume
What is the importance of 52-week high and low in breakout stocks?
The 52-week high and low indicate the highest and lowest prices a stock has reached in the past year. Approaching the 52-week high suggests potential for a breakout, while being well above the 52-week low shows recovery and strength. These levels help investors gauge momentum and risk.
What is the best time frame for trading breakout stocks?
The ideal time frame depends on your trading style. Intraday traders may use 5- or 15-minute charts, while swing traders often prefer daily or 4-hour charts. Shorter time frames offer quicker trades, while longer ones can capture more significant moves.
How do I avoid false breakouts?
To avoid false breakouts, look for breakouts confirmed by high volume and use additional indicators like moving averages. Patience is key—wait for a clear signal before entering a trade. Alternatively, consulting a professional before proceeding can also be worthwhile.
Can breakout trading be automated?
Yes, breakout trading can be automated using trading bots or algorithms. These tools can monitor specific criteria, like price levels and volume, to execute trades automatically.
Are breakout stocks suitable for beginners?
Breakout stocks can be suitable for beginners, but they require understanding of technical analysis and risk management. Novice traders should start with small positions and practice on a demo account to gain experience. Remember, it is always worthwhile to consult a professional before putting any money in.
As an insatiable reader and learner, I’ve spent the last two years exploring the world of finance. With my creative mind and curious spirit, I love making complex finance topics easy and fun for everyone to understand. Join me on my journey as we navigate the world of finance together!
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