Picking a winning trade on a consistent basis is not simply a stroke of luck. It’s the result of calculated screening, planning, and deliberation.
With this in mind, we have started a new weekly series on our top 10 stocks to watch this week — stocks that look poised for a possible breakout in the coming days. Traders should add these stocks to their watchlist now.
The Top 10 Stocks to Watch This Week for Possible Breakouts
| Sl # | Name of the Stock | Stock Ticker | Last Close | Buy Level(s) | Reason |
| 1 | Carrols Restaurant Group, Inc. | NASDAQ: TAST | $7.32 | $7.50 | Ascending Triangle Pattern |
| 2 | Graco Inc. | NYSE: GGG | $69.33 | $73.00 | Flag Pattern |
| 3 | Cushman & Wakefield plc | NYSE: CWK | $17.41 | $17.80 | Ascending Triangle Pattern |
| 4 | Apollo Global Management, Inc. | NYSE: APO | $48.08 | $52.50 | Symmetrical Triangle Pattern |
| 5 | Huntsman Corporation | NYSE: HUN | $29.44 | $29.60 | Consolidation Area |
| 6 | RAPT Therapeutics, Inc. | NASDAQ: RAPT | $22.29 | $25.60 | Double Bottom Pattern |
| 7 | Eaton Vance Municipal Income 2028 Term Trust | NYSE: ETX | $22.79 | $23.00 | Symmetrical Triangle Pattern |
| 8 | Community Health Systems, Inc. | NYSE: CYH | $11.28 | $11.60 | Uptrend Channel |
| 9 | Canoo Inc. | NASDAQ: GOEV | $14.82 | $16.50 | Falling Wedge Pattern |
| 10 | Grupo Televisa, S.A.B. | NYSE: TV | $8.63 | $9.10 | Flag Pattern |
Important: Typically, these trades offer a risk: reward ratio of 1:2 or 1:3 in the next 6 months, which implies 2x to 3x rewards when compared to risks. So, be sure to set your stop-loss levels and target prices accordingly to manage your risk. In addition, these trade ideas are triggered using daily closing prices, not intra-day pricing. So, if you participate in these trades, make sure that you only buy the stock once its daily close is above the recommended price level.
That said, here are the top 10 stocks to watch for a breakout, in no particular order.
#1 Carrols Restaurant Group, Inc. (NASDAQ: TAST)
Sector: Consumer Cyclical | Restaurants
Reason: Formation of an Ascending Triangle Pattern
An ascending triangle pattern is a bullish pattern formed by drawing a horizontal line along the swing highs, and a rising trendline along the swing lows. These two lines result in the formation of a triangle. A breakout from this pattern is typically a strong bullish indication.
Buy Level(s): The ideal buy level for TAST is if the stock has a daily close above the breakout level of the ascending triangle pattern, at around $7.50. This is marked in the chart below as a green color dotted line.
Daily chart – TAST
TAST- Ascending Triangle Pattern
#2 Graco Inc. (NYSE: GGG)
Sector: Industrials | Specialty Industrial Machinery
Reason: Formation of a Flag Pattern
A flag pattern is a short-term continuation pattern that marks a small consolidation before the previous move resumes. The pattern is formed when the market consolidates in a narrow range after a sharp move. For a stock in an uptrend, a breakout from this pattern is typically a strong bullish indication.
Buy Level(s): The ideal buy level for GGG is if the stock has a daily close above the breakout level of the flag pattern, at around $73.00. This is marked in the chart below as a green color dotted line.
Daily chart – GGG
GGG – Flag Pattern
#3 Cushman & Wakefield plc (NYSE: CWK)
Sector: Real Estate | Real Estate Services |
Reason: Formation of an Ascending Triangle Pattern
An ascending triangle pattern is a bullish pattern formed by drawing a horizontal line along the swing highs, and a rising trendline along the swing lows. These two lines result in the formation of a triangle. A breakout from this pattern is typically a strong bullish indication.
Buy Level(s): The ideal buy level for CWK is if the stock has a daily close above the breakout level of the ascending triangle pattern, at around $17.80. This is marked in the chart below as a green color dotted line.
Daily chart – CWK
CWK – Ascending Triangle Pattern
#4 Apollo Global Management, Inc. (NYSE: APO)
Sector: Financial | Asset Management
Reason: Formation of a Symmetrical Triangle Pattern
A symmetrical triangle is a chart pattern formed by two converging trend lines connecting a series of sequential peaks and troughs. These two lines result in the formation of a triangle that appears to be symmetrical.
A symmetrical triangle pattern is usually formed when there is an indecision in the price movements and there is uncertainty among the buyers and sellers. This chart pattern represents a period of consolidation before the price breaks out or breaks down. In case a breakout occurs from the upper trend line, it is a strong bullish indication as it signifies the start of a new bullish trend.
Buy Level(s): The ideal buy level for APO is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $52.50. This is marked in the chart below as a green color dotted line.
Daily chart – APO
APO – Symmetrical Triangle Pattern
#5 Huntsman Corporation (NYSE: HUN)
Sector: Basic Materials | Chemicals
Reason: Formation of a Consolidation Area in the Daily Chart
A Consolidation Area is a price action contained between two parallel lines. It is formed by a lower line that connects the lows, and an upper line that joins the highs. A stock usually trades between the two lines of the consolidation area before finally breaking out from the upper rail.
Buy Level(s): The ideal buy level for HUN is if the stock has a daily close above the breakout level of the consolidation area, at around $29.60. This is marked in the chart below as a green color dotted line.
Daily chart – HUN
HUN – Consolidation Area
#6 RAPT Therapeutics, Inc. (NASDAQ: RAPT)
Sector: Healthcare | Biotechnology
Reason: Formation of a Double Bottom Pattern
A Double Bottom Pattern looks like the letter W and is characterized by two well-defined lows at approximately the same price level. This twice-touched low is usually a very strong support level. The high point between the two bottoms’ resistance levels is called the neckline. Once a breakout happens from this key price level (neckline), it signifies the start of a bullish move.
Buy Level(s): The ideal buy level for RAPT is above the neckline of the double bottom pattern, at around $25.60. This is marked in the chart below as a green color dotted line.
Daily chart – RAPT
RAPT – Double Bottom Pattern
#7 Eaton Vance Municipal Income 2028 Term Trust (NYSE: ETX)
Sector: Financial | Asset Management
Reason: Formation of a Symmetrical Triangle Pattern
A symmetrical triangle is a chart pattern formed by two converging trend lines connecting a series of sequential peaks and troughs. These two lines result in the formation of a triangle that appears to be symmetrical.
A symmetrical triangle pattern is usually formed when there is an indecision in the price movements and there is uncertainty among the buyers and sellers. This chart pattern represents a period of consolidation before the price breaks out or breaks down. In case a breakout occurs from the upper trend line, it is a strong bullish indication as it signifies the start of a new bullish trend.
Buy Level(s): The ideal buy level for ETX is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $23.00. This is marked in the chart below as a green color dotted line.
Daily chart – ETX
ETX – Symmetrical Triangle Pattern
#8 Community Health Systems, Inc. (NYSE: CYH)
Sector: Healthcare | Medical Care Facilities
Reason: Formation of an Uptrend Channel
An uptrend channel or an ascending channel is the price action contained between upward sloping parallel lines. It is formed by a lower trend line that connects the swing lows, and an upper channel line that joins the swing highs. A stock usually trades between the two rails of the uptrend channel before finally breaking out from the upper rail.
Buy Level(s): The ideal buy level for CYH is if the stock has a daily close above the breakout level of the uptrend channel, at around $11.60. This is marked in the chart below as a green color dotted line.
Daily chart – CYH
CYH – Uptrend Channel
#9 Canoo Inc. (NASDAQ: GOEV)
Sector: Consumer Cyclical | Auto Manufacturers
Reason: Formation of a Falling Wedge Pattern
A falling wedge pattern is formed by joining two downward-sloping, converging trendlines having a contracting range. The pattern appears to be wide at the top and continues to contract as prices fall. A breakout from a falling wedge pattern can indicate either reversal or continuation depending on where the pattern appeared in the trend.
A stock that has broken out of a falling wedge pattern would have gained momentum and would have the potential to move higher.
Buy Level(s): The ideal buy level for GOEV is if the stock breaks out of the falling wedge pattern as well as closes above the immediate resistance level of $16.50. This is marked in the chart below as a green color dotted line.
Daily chart – GOEV
GOEV – Falling Wedge Pattern
#10 Grupo Televisa, S.A.B. (NYSE: TV)
Sector: Communication Services | Broadcasting
Reason: Formation of a Flag Pattern
A flag pattern is a short-term continuation pattern that marks a small consolidation before the previous move resumes. The pattern is formed when the market consolidates in a narrow range after a sharp move. For a stock in an uptrend, a breakout from this pattern is typically a strong bullish indication.
Buy Level(s): The ideal buy level for TV is if the stock has a daily close above the breakout level of the flag pattern, at around $9.10. This is marked in the chart below as a green color dotted line.
Daily chart – TV
TV – Flag Pattern
Happy Trading!
Trades of The Day Research Team