What Is Upside Breakout
Upside Breakout is best viewed as stocks with the most potential to see a big gain but be sure to look at Downside Breakout too, as high potential stocks often come with high risk.
How to use Upside Breakout?
A high Upside Breakout (80 and above) indicates that, in our models, the value of this stock has the highest potential to increase significantly. Our 5 year back test showed that holding stocks with ratings 80 or above on a given day for a full year would have outperformed the S&P 500 by 80% of the time over a similar time frame.1 Unlike other Key Drivers, a lower number (20 and below) doesn't mean a loss. It just means a lower chance of a significant gain which could just as easily be a low gain. Stocks with high Upside Breakout tend to be stocks in which there is a larger demand for positive bets in the long term options markets and/or attractive analyst coverage (price targets and ratings) and/or positive price momentum. Volatile stocks (stocks that are prone to swings up and down) have a higher probability of both Upside Breakout and Downside Breakout.
At the simplest level, Upside Breakout is a measure of what Prospero believes to have the largest potential to offer significant returns. However, it is not the only factor and other ones should be considered. Prospero isn't saying that if you invest in stocks with the 10 highest Upside Breakout potentials you'll win; all factors must be considered especially Downside Breakout.
Take the simple example of a stock with 100 Upside Breakout and 90 Downside Breakout rating. All other factors being equal, you would do better on a larger time scale with companies that had a 90 Upside Breakout rating and 20 Downside Breakout rating. There is a reason we provide you with all these factors. Prospero was built on the idea that a measure such as Price Target or Buy/Sell rating do not provide enough information and outside of these oversimplified factors, it is hard to wade through the sea of additional information provided. Make sure to consider many of the factors we present to make your investment decisions.
Update Frequency and Usage for Upside Breakout
Upside Breakout updates 4 times a day. Because of this you can generally count on it to include timely information to trade on. Since this is a long term signal it generally moves less often / sharply than Net Options Sentiment but things change fast in the stock market and we've seen moves as much as 30+ in a week so keep your eye on this every day as a big move could indicate a great trading opportunity.