Time To Take Profits On These Recent Breakout Stocks?

Breakout stocks Steel Dynamics (STLD) and Pinduoduo (PDD) are hitting new highs and stand among the few recent market winners.

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Investors may be wondering if now is a good time to take profits in these breakout stocks. The short answer is yes. Now could be a smart time to take at least partial profits on both winning positions.

Steel Dynamics broke out from an 88.72 buy point on Oct. 21 amid a post-earning rally. After rising for a few weeks, shares finally reached the 20% profit zone. The breakout stock is trading nicely above its 21-day exponential moving average and shows no signs of slowing down, however.

STLD rallied about 4% on Friday and maintains an Accumulation/Distribution Rating of A, which shows the stock is under accumulation by major institutions.

Meanwhile, shares of Chinese e-commerce platform Pinduoduo also reached a profit zone on Friday. Shares broke out from a 73.12 buy point last Monday and charged ahead, reaching the profit zone in less than a week. In fact, shares of the Pinduoduo rallied more than 30% the past week.

The breakout stock got a boost from powerful Q3 earnings, which were released on Monday and sparked a 12% gain in one day. The firm’s EPS grew by 256% on a year-over-year basis while sales grew 50%.

The stock has been moving higher in strong volume this week amid a collective rally in China stocks. Investors are hopeful that Chinese health officials will continue to ease their zero-tolerance approach to the recent Covid outbreak.

Breakout Stocks To Watch: ADP

Elsewhere, ADP (ADP), another breakout stock worth noting, has reached a new 52-week high. Shares broke out last week from a 261.69 cup-base buy point. ADP is currently within the its 5% buy zone, which means the stock is still actionable.

ADP provides human resources outsourcing services such as payroll services, tax and compliance services, benefits and more.

Shares are trading above their 21-day and 50-day moving averages, according to MarketSmith.