Based on good technical signals, ARES CAPITAL CORP is potentially setting up for a breakout.

Our stock screener has identified ARES CAPITAL CORP (NASDAQ:ARCC) as a potential breakout candidate. This technical breakout setup pattern occurs when the stock consolidates after a strong uptrend. While the actual breakout is uncertain, it may be worth keeping an eye on NASDAQ:ARCC.

Technical analysis of NASDAQ:ARCC

ChartMill employs a sophisticated system to assign a Technical Rating to every stock in its analysis. This rating, which ranges from 0 to 10, is determined by carefully assessing multiple technical indicators and properties.

We assign a technical rating of 7 out of 10 to ARCC. This is due to a decent performance in both the short and medium term time frames. Compared to the overall market, ARCC is only an average performer.

• Both the short term and long term trends are positive. This is a very positive sign.
• ARCC is currently trading near its 52 week high, which is a good sign. The S&P500 Index is trading in the upper part of its 52 week range, but not near new highs, so ARCC is leading the market.
• When compared to the yearly performance of all other stocks, ARCC outperforms 65% of them, which is more or less in line with the market.
• ARCC is part of the Capital Markets industry. There are 210 other stocks in this industry, ARCC did better than 61% of them.
• In the last month ARCC has a been trading in a tight range between 20.13 and 20.94.

Check the latest full technical report of ARCC for a complete technical analysis.

How do we evaluate the setup for NASDAQ:ARCC?

In addition to the Technical Rating, ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the extent of consolidation in the stock based on multiple short-term technical indicators. Currently, NASDAQ:ARCC has a 9 as its setup rating:

Besides having an excellent technical rating, ARCC also presents a decent setup pattern. Prices have been consolidating lately. A pullback is taking place, which may present a nice opportunity for an entry. There is a support zone below the current price at 20.53, a Stop Loss order could be placed below this zone. We notice that large players showed an interest for ARCC in the last couple of days, which is a good sign. Another positive sign is the recent Pocket Pivot signal.

Trading breakout setups.

A breakout opportunity may arise when the stock surpasses the current consolidation zone and reaches new highs. Traders often wait for this breakout before considering buying the stock. To manage risk, a stop loss order could be placed below the consolidation zone to limit potential losses.

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents technical observations generated by automated analysis but does not guarantee any trading outcomes. Always trade responsibly and make independent judgments.

More breakout setups can be found in our Breakout screener.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.