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 | Laboratory Corporation of America Holdings | NYSE: LH | $276.45 | $284.00 | Ascending Triangle Pattern |
| 2 | SciPlay Corporation | NASDAQ: SCPL | $16.89 | $19.00 | Symmetrical Triangle Pattern |
| 3 | I-Mab | NASAQ: IMAB | $77.45 | $85.10 | Consolidation Area |
| 4 | Zynex, Inc. | NASDAQ: ZYXI | $16.81 | $17.00 | Symmetrical Triangle Pattern |
| 5 | MoneyGram International, Inc. | NASDAQ: MGI | $10.27 | $11.70 | Ascending Triangle Pattern |
| 6 | IDEX Corporation | NYSE: IEX | $226.67 | $229.00 | Flag Pattern |
| 7 | AMETEK, Inc. | NYSE: AME | $136.23 | $140.00 | Consolidation Area |
| 8 | Ball Corporation | NYSE: BLL | $85.75 | $94.00 | Double Bottom Pattern |
| 9 | Matson, Inc. | NYSE: MATX | $65.34 | $70.00 | Downtrend Channel |
| 10 | Apria, Inc. | NASDAQ: APR | $27.64 | $29.00 | Symmetrical Triangle 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 Laboratory Corporation of America Holdings (NYSE: LH)
Sector: Healthcare | Diagnostics & Research
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 LH is if the stock has a daily close above the breakout level of the ascending triangle pattern, at around $284.00. This is marked in the chart below as a green color dotted line.
Daily chart – LH
LH – Ascending Triangle Pattern
#2 SciPlay Corporation (NASDAQ: SCPL)
Sector: Communication Services | Electronic Gaming & Multimedia
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 SCPL is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $19.00. This is marked in the chart below as a green color dotted line.
Daily chart – SCPL
SCPL – Symmetrical Triangle Pattern
#3 I-Mab (NASDAQ: IMAB)
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 IMAB is if the stock has a daily close above the breakout level of the consolidation area, at around $85.10. This is marked in the chart below as a green color dotted line.
Daily chart – IMAB
IMAB – Consolidation Area
#4 Zynex, Inc. (NASDAQ: ZYXI)
Sector: Healthcare | Medical Devices
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 ZYXI is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $17.00. This is marked in the chart below as a green color dotted line.
Daily chart – ZYXI
ZYXI – Symmetrical Triangle Pattern
#5 MoneyGram International, Inc. (NASDAQ: MGI)
Sector: Financial | Credit Services
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 MGI is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $11.70. This is marked in the chart below as a green color dotted line.
Daily chart – MGI
MGI – Ascending Triangle Pattern
#6 IDEX Corporation (NYSE: IEX)
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 IEX is if the stock breaks out of the flag pattern, at around $229.00. This is marked in the chart below as a green color dotted line.
Daily chart – IEX
IEX – Flag Pattern
#7 AMETEK, Inc. (NYSE: AME)
Sector: Industrials | Specialty Industrial Machinery
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 AME is if the stock has a daily close above the breakout level of the consolidation area, at around $140.00. This is marked in the chart below as a green color dotted line.
Daily chart – AME
AME – Consolidation Area
#8 Ball Corporation (NYSE: BLL)
Sector: Consumer Cyclical | Packaging & Containers
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 level 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 BLL is if the stock has a daily close above the breakout level of the double bottom pattern, at around $94.00. This is marked in the chart below as a green color dotted line.
Daily chart – BLL
BLL – Double Bottom Pattern
#9 Matson, Inc. (NYSE: MATX)
Sector: Industrials | Marine Shipping
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 MATX is if the stock has a daily close above the breakout level of the downtrend channel and closes above the near-term resistance level of $70.00. This is marked in the chart below as a green color dotted line.
Daily chart – MATX
MATX – Downtrend Channel
#10 Apria, Inc. (NASDAQ: APR)
Sector: Healthcare | Medical Instruments & Supplies
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 APR is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $29.00. This is marked in the chart below as a green color dotted line.
Daily chart – APR
APR – Symmetrical Triangle Pattern
Happy Trading!
— Trades of The Day Research Team
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