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 | Ross Stores, Inc. | NASDAQ: ROST | $123.20 | $129.00 | Symmetrical Triangle Pattern |
| 2 | Foot Locker, Inc. | NYSE: FL | $58.30 | $63.50 | Downtrend Channel |
| 3 | Houlihan Lokey, Inc. | NYSE: HLI | $89.30 | $90.00 | Ascending Triangle Pattern |
| 4 | Amdocs Limited | NASDAQ: DOX | $78.00 | $81.00 | Symmetrical Triangle Pattern |
| 5 | Telos Corporation | NASDAQ: TLS | $29.23 | $35.50 | Downtrend Channel |
| 6 | Liberty Latin America Ltd. | NASDAQ: LILAK | $13.81 | $15.00 | Consolidation Area |
| 7 | Integra LifeSciences Holdings Corporation | NASDAQ: IART | $71.38 | $73.00 | Symmetrical Triangle Pattern |
| 8 | PPL Corporation | NYSE: PPL | $29.74 | $31.00 | Ascending Triangle Pattern |
| 9 | Praxis Precision Medicines, Inc. | NASDAQ: PRAX | $18.76 | $24.00 | Downtrend Channel |
| 10 | NVIDIA Corporation | NASDAQ: NVDA | $208.16 | $209.00 | 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 Ross Stores, Inc. (NASDAQ: ROST)
Sector: Consumer Cyclical | Apparel Retail
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 ROST is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $129.00. This is marked in the chart below as a green color dotted line.
Daily chart – ROST
ROST – Symmetrical Triangle Pattern
#2 Foot Locker, Inc. (NYSE: FL)
Sector: Consumer Cyclical | Footwear & Accessories
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 FL is if the stock has a daily close above the breakout level of the downtrend channel, at around $63.50. This is marked in the chart below as a green color dotted line.
Daily chart – FL
FL – Downtrend Channel
#3 Houlihan Lokey, Inc. (NYSE: HLI)
Sector: Financial | Capital Markets
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 HLI is if the stock has a daily close above the breakout level of the ascending triangle pattern, at around $90.00. This is marked in the chart below as a green color dotted line.
Daily chart – HLI
HLI – Ascending Triangle Pattern
#4 Amdocs Limited (NASDAQ: DOX)
Sector: Technology | Software – Infrastructure
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 DOX is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $81.00. This is marked in the chart below as a green color dotted line.
Daily chart – DOX
DOX – Symmetrical Triangle Pattern
#5 Telos Corporation (NASDAQ: TLS)
Sector: Technology | Information Technology Services
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 TLS is if the stock has a daily close above the breakout level of the downtrend channel, at around $35.50. This is marked in the chart below as a green color dotted line.
Daily chart – TLS
TLS – Downtrend Channel
#6 Liberty Latin America Ltd. (NASDAQ: LILAK)
Sector: Communication Services | Telecom Services
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 LILAK is if the stock has a daily close above the breakout level of the consolidation area, at around $15.00. This is marked in the chart below as a green color dotted line.
Daily chart – LILAK
LILAK – Consolidation Area
#7 Integra LifeSciences Holdings Corporation (NASDAQ: IART)
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 IART is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $73.00. This is marked in the chart below as a green color dotted line.
Daily chart – IART
IART – Symmetrical Triangle
#8 PPL Corporation (NYSE: PPL)
Sector: Utilities | Utilities – Regulated Electric
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 PPL is if the stock has a daily close above the breakout level of the ascending triangle pattern, at around $31.00. This is marked in the chart below as a green color dotted line.
Daily chart – PPL
PPL – Ascending Triangle
#9 Praxis Precision Medicines, Inc. (NASDAQ: PRAX)
Sector: Healthcare | Biotechnology
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 PRAX is if the stock has a daily close above the breakout level of the downtrend channel, at around $24.00. This is marked in the chart below as a green color dotted line.
Daily chart – PRAX
PRAX – Downtrend Channel
#10 NVIDIA Corporation (NASDAQ: NVDA)
Sector: Technology | Semiconductors
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 NVDA is if the stock has a daily close above the breakout level of the flag pattern, at around $209.00. This is marked in the chart below as a green color dotted line.
Daily chart – NVDA
NVDA – Flag Pattern
Happy Trading!
Trades of The Day Research Team
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