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 | Levi Strauss & Co. | NYSE: LEVI | $28.38 | $31.00 | Symmetrical Triangle Pattern Breakout |
| 2 | New York Community Bancorp, Inc. | NYSE: NYCB | $11.33 | $12.00 | Downtrend Channel |
| 3 | OncoCyte Corporation | NASDAQ: OCX | $5.75 | $6.70 | Consolidation Area |
| 4 | CenterPoint Energy, Inc. | NYSE: CNP | $25.47 | $26.40 | Ascending Triangle Pattern |
| 5 | Public Service Enterprise Group Incorporated | NYSE: PEG | $60.49 | $61.70 | Downtrend Channel |
| 6 | Voya Financial, Inc. | NYSE: VOYA | $62.33 | $63.50 | Symmetrical Triangle Pattern |
| 7 | Repay Holdings Corporation | NASDAQ: RPAY | $24.82 | $28.00 | Consolidation Area |
| 8 | Shift Technologies, Inc. | NASDAQ: SFT | $8.89 | $9.30 | Downtrend Channel |
| 9 | Woodward, Inc. | NASDAQ: WWD | $123.04 | $130.50 | Ascending Triangle Pattern |
| 10 | Matson, Inc. | NYSE: MATX | $68.12 | $69.30 | Downtrend Channel Breakout |
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 Levi Strauss & Co. (NYSE: LEVI)
Sector: Consumer Cyclical | Apparel Manufacturing
Reason: Breakout from 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 daily chart shows that the stock has currently broken out of a symmetrical triangle pattern. However, there is a near-term resistance level for the stock. Hence, the ideal buy level for LEVI is if the stock has a daily close above $31.00. This is marked in the chart below as a green color dotted line.
Daily chart – LEVI
LEVI – Symmetrical Triangle Pattern Breakout
#2 New York Community Bancorp, Inc. (NYSE: NYCB)
Sector: Financial | Banks – Regional
Reason: Formation of a Downtrend Channel
A downtrend or descending channel is the price action contained between downward sloping parallel lines. It is formed by two lines that are drawn by connecting the lower highs and lower lows of a stock’s price. Even though this is typically a bearish pattern, a breakout from the upper rail of this pattern is considered a good bullish indication.
Buy Level(s): The ideal buy level for NYCB is if the stock has a daily close above the breakout level of the downtrend channel, at around $12.00. This is marked in the chart below as a green color dotted line.
Daily chart – NYCB
NYCB – Downtrend Channel
#3 OncoCyte Corporation (NASDAQ: OCX)
Sector: Healthcare | Biotechnology
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 OCX is if the stock has a daily close above the breakout level of the consolidation area, at around $6.70. This is marked in the chart below as a green color dotted line.
Daily chart – OCX
OCX – Consolidation Area
#4 CenterPoint Energy, Inc. (NYSE: CNP)
Sector: Utilities | Utilities – Regulated Gas
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 CNP is if the stock has a daily close above the breakout level of the ascending triangle pattern, at around $26.40. This is marked in the chart below as a green color dotted line.
Daily chart – CNP
CNP – Ascending Triangle Pattern
#5 Utilities | Utilities – Diversified (NYSE: PEG)
Sector: Utilities | Utilities – Diversified
Reason: Formation of a Downtrend Channel
A downtrend or descending channel is the price action contained between downward sloping parallel lines. It is formed by two lines that are drawn by connecting the lower highs and lower lows of a stock’s price. Even though this is typically a bearish pattern, a breakout from the upper rail of this pattern is considered a good bullish indication.
Buy Level(s): The ideal buy level for PEG is if the stock has a daily close above the breakout level of the downtrend channel, at around $61.70. This is marked in the chart below as a green color dotted line.
Daily chart – PEG
PEG – Downtrend Channel
#6 Voya Financial, Inc. (NYSE: VOYA)
Sector: Financial | Financial Conglomerates
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 VOYA is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $63.50. This is marked in the chart below as a green color dotted line.
Daily chart – VOYA
VOYA – Symmetrical Triangle Pattern
#7 Repay Holdings Corporation (NASDAQ: RPAY)
Sector: Technology | Software – Infrastructure
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 RPAY is if the stock has a daily close above the breakout level of the consolidation area, at around $28.00. This is marked in the chart below as a green color dotted line.
Daily chart – RPAY
RPAY – Consolidation Area
#8 Shift Technologies, Inc. (NASDAQ: SFT)
Sector: Consumer Cyclical | Internet Retail
Reason: Formation of a Downtrend Channel
A downtrend or descending channel is the price action contained between downward sloping parallel lines. It is formed by two lines that are drawn by connecting the lower highs and lower lows of a stock’s price. Even though this is typically a bearish pattern, a breakout from the upper rail of this pattern is considered a good bullish indication.
Buy Level(s): The ideal buy level for SFT is if the stock has a daily close above the breakout level of the downtrend channel, at around $9.30. This is marked in the chart below as a green color dotted line.
Daily chart – SFT
SFT – Downtrend Channel
#9 Woodward, Inc. (NASDAQ: WWD)
Sector: Industrials | Aerospace & Defense
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 WWD is if the stock has a daily close above the breakout level of the ascending triangle pattern, at around $130.50. This is marked in the chart below as a green color dotted line.
Daily chart – WWD
WWD – Ascending Triangle Pattern
#10 Matson, Inc. (NYSE: MATX)
Sector: Industrials | Marine Shipping
Reason: Downtrend Channel Pattern Breakout
A downtrend or descending channel is the price action contained between downward sloping parallel lines. It is formed by two lines that are drawn by connecting the lower highs and lower lows of a stock’s price. Even though this is typically a bearish pattern, a breakout from the upper rail of this pattern is considered a good bullish indication.
Buy Level(s): The daily chart shows that the stock has currently broken out of a downtrend channel. However, there is a near-term resistance level for the stock. Hence, the ideal buy level for MATX is if the stock has a daily close above $69.30. This is marked in the chart below as a green color dotted line.
Daily chart – MATX
MATX – Downtrend Channel Breakout
Happy Trading!
Trades of The Day Research Team
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