The Top 10 Stocks to Watch This Week for Possible Breakouts

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 Embraer S.A. NYSE: ERJ $15.75 $17.00 Symmetrical Triangle Pattern Breakout
2 Teradata Corporation NYSE: TDC $55.13 $56.00 Ascending Triangle Pattern
3 The Walt Disney Company NYSE: DIS $181.08 $190.00 Downtrend Channel
4 Bluescape Opportunities Acquisition Corp. NYSE: BOAC $9.77 $10.00 Consolidation Area
5 eBay Inc. NASDAQ: EBAY $74.02 $75.00 Uptrend Channel
6 Pretium Resources Inc. NYSE: PVG $9.85 $10.30 Downtrend Channel
7 DoorDash, Inc. NYSE: DASH $194.79 $215.20 Symmetrical Triangle Pattern
8 The ExOne Company NASDAQ: XONE $24.24 $27.10 Falling Wedge Pattern Breakout
9 Conduent Incorporated NASDAQ: CNDT $7.37 $8.30 Flag Pattern Breakout
10 Tyson Foods, Inc. NYSE: TSN $81.91 $84.50 Uptrend Channel

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 Embraer S.A. (NYSE: ERJ)

Sector: Industrials | Aerospace & Defense

Reason: Symmetrical Triangle Pattern Breakout

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 stock has currently broken out of a symmetrical triangle pattern. However, the ideal buy level for ERJ is if the stock closes above the immediate resistance level of $17.00. This is marked in the chart below as a green color dotted line.

Daily chart – ERJ

ERJ – Symmetrical Triangle Pattern Breakout

#2 Teradata Corporation (NYSE: TDC)

Sector: Technology | Information Technology 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 TDC is if the stock has a daily close above the breakout level of the ascending triangle pattern, at around $56.00. This is marked in the chart below as a green color dotted line.

Daily chart – TDC

TDC – Ascending Triangle Pattern

#3 The Walt Disney Company (NYSE: DIS)

Sector: Communication Services | Entertainment

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 DIS is if the stock has a daily close above the breakout level of the downtrend channel, at around $190.00. This is marked in the chart below as a green color dotted line.

Daily chart – DIS

DIS – Downtrend Channel

#4 Bluescape Opportunities Acquisition Corp. (NYSE: BOAC)

Sector: Financial | Shell Companies

Reason: Formation of a Consolidation Area

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 BOAC is if the stock has a daily close above the breakout level of the consolidation area, at around $10.00. This is marked in the chart below as a green color dotted line.

Daily chart – BOAC

BOAC – Consolidation Area

#5 eBay Inc. (NASDAQ: EBAY)

Sector: Consumer Cyclical | Internet Retail

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 EBAY is if the stock has a daily close above the near-term resistance level of $75.00 within the uptrend channel. This is marked in the chart below as a green color dotted line.

Daily chart – EBAY

EBAY – Uptrend Channel

#6 Pretium Resources Inc. (NYSE: PVG)

Sector: Basic Materials | Gold

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 PVG is if the stock has a daily close above the breakout level of the downtrend channel, at around $10.30. This is marked in the chart below as a green color dotted line.

Daily chart – PVG

PVG – Downtrend Channel

#7 DoorDash, Inc. (NYSE: DASH)

Sector: Communication Services | Internet Content & Information

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 DASH is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $215.20. This is marked in the chart below as a green color dotted line.

Daily chart – DASH

DASH – Symmetrical Triangle Pattern

#8 The ExOne Company (NASDAQ: XONE)

Sector: Industrials | Specialty Industrial Machinery

Reason: Breakout From 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): Even though the stock has broken out of a falling wedge pattern, the ideal buy level for XONE is above the immediate resistance level of $27.10. This is marked in the chart below as a green color dotted line.

Daily chart – XONE

XONE – Falling Wedge Pattern Breakout

#9 Conduent Incorporated (NASDAQ: CNDT)

Sector: Technology | Information Technology Services

Reason: Breakout From 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): Although the stock has currently broken out of the flag pattern, the ideal buy level for CNDT is above the near-term resistance level of $8.30. This is marked in the chart below as a green color dotted line.

Daily chart – CNDT

CNDT – Flag Pattern Breakout

#10 Tyson Foods, Inc. (NYSE: TSN)

Sector: Consumer Defensive | Farm Products

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 TSN is if the stock has a daily close above the near-term resistance level of $84.50 within the uptrend channel. This is marked in the chart below as a green color dotted line.

Daily chart – TSN

TSN Uptrend Channel

Happy Trading!

Trades of The Day Research Team