Momentum Alert: 3 Underfollowed Stocks on the Verge of a Breakout

Zacks
02-12

The broader market has been stuck in a holding pattern over the past couple of months, with many of the usual leaders consolidating after strong gains. While these stocks remain compelling long-term investments, they may need more time to rest before resuming their uptrends.

Meanwhile, a few under-the-radar stocks are bucking the trend and gaining momentum despite the market’s relative quiet period. I’ve identified three top-ranked names—Innodata (INOD), Dana (DAN), and National Fuel Gas Company (NFG)—that are forming strong technical setups and boast upward-trending earnings revisions. Let’s take a closer look at these breakout candidates and the opportunities they present.


Image Source: Zacks Investment Research

Dana: EV Supplier Stock Gaining Momentum

Dana is a key supplier to the electric vehicle (EV) industry, specializing in driveline and thermal management solutions. As the EV market continues to expand, Dana is well-positioned to benefit from increasing demand for its components.

The company's earnings outlook has been improving significantly, withcurrent quarter earnings estimates rising by 25% in the last 60 days and next-year projections jumping 15.4%. This strong upward trend in earnings revisions has earned Dana a Zacks Rank #1 (Strong Buy), signaling strong fundamentals and positive analyst sentiment.

On the technical side, Dana’s share price has been forming a compelling bull flag pattern over the past couple of weeks, indicating a period of consolidation before a potential breakout. If the stock can push above the $16.40 resistance level, it would confirm a technical breakout and could drive the next leg higher. With both fundamental strength and technical momentum, Dana presents an exciting opportunity for investors looking for an under-the-radar growth play.


Image Source: TradingView

Innodata: Small-Cap AI Stock Bull Flag

Innodata is a small-cap artificial intelligence (AI) company specializing in data engineering and AI-driven analytics, serving enterprises looking to harness machine learning and automation. As AI adoption accelerates across industries, Innodata has emerged as a high-growth player in this rapidly expanding sector.

The company has been riding a wave of strong earnings momentum, earning a Zacks Rank #1 (Strong Buy) thanks to powerful upward earnings revisions. Revenue growth expectations are also impressive, with annual sales projected to surge 89.5% this year and another 34.6% next year, reflecting the company's expanding market presence.

After a massive rally in the second half of 2024, INOD has entered a broad technical consolidation, forming a bull flag pattern. The wide price range suggests that institutions are quietly accumulating shares, a bullish signal for long-term investors. A breakout above the $45 resistance level could propel the stock to new all-time highs, offering a compelling setup for momentum traders.


Image Source: TradingView

National Fuel Gas Company: Value, Growth and Momentum

National Fuel Gas Company is a diversified natural gas utility and energy company, operating across the exploration, production, transportation, and distribution segments. With the resurgence of interest in US energy independence and domestic production, natural gas stocks stand to benefit under the pro-energy policies of the new administration.

The company has been experiencing strong earnings momentum, boasting a Zacks Rank #1 (Strong Buy) with current-quarter earnings estimates up 16.6% and next year projections rising 14.2%—a clear sign that analysts are becoming increasingly bullish on its outlook.

After an incredible start to the year, NFG share price has been consolidating for the last few days forming a tidy bull flag pattern. If the stock can break out above the $72.75 resistance level, it may trigger another big leg higher, fueled by both fundamental strength and favorable macro tailwinds in the natural gas sector.


Image Source: TradingView

Should Investors Buy Shares in INOD, DAN and NFG?

With the broader market in a consolidation phase, momentum traders can focus on stocks that are defying the trend. Innodata, Dana, and National Fuel Gas Company all exhibit strong technical setups, backed by rising earnings estimates and favorable industry trends.

Each stock is building constructive price action, with potential breakouts ahead. If they clear key resistance levels, the momentum could drive another leg higher, making them compelling opportunities for investors looking for stocks on the move.

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Dana Incorporated (DAN) : Free Stock Analysis Report

National Fuel Gas Company (NFG) : Free Stock Analysis Report

Innodata Inc. (INOD) : Free Stock Analysis Report

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