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 Horizon Therapeutics Public Limited Company NASDAQ: HZNP $62.97 $67.00 Falling Wedge Pattern
2 AbbVie Inc. NYSE: ABBV $143.06 $146.00 Flag Pattern Breakout
3 America Movil, S.A.B. de C.V. NYSE: AMX $17.49 $17.80 Downtrend Channel
4 Leslie’s, Inc. NASDAQ: LESL $13.45 $14.40 Falling Wedge Pattern
5 Eli Lilly and Company NYSE: LLY $311.46 $315.50 Symmetrical Triangle Pattern
6 Freshpet, Inc. NASDAQ: FRPT $45.37 $46.80 Falling Wedge Pattern Breakout
7 Maravai LifeSciences Holdings, Inc. NASDAQ: MRVI $25.82 $26.80 Downtrend Channel
8 Vertical Aerospace Ltd. NYSE: EVTL $8.28 $8.50 Symmetrical Triangle Pattern Breakout
9 Abercrombie & Fitch Co. NYSE: ANF $15.88 $16.60 Falling Wedge Pattern
10 Envista Holdings Corporation NYSE: NVST $34.67 $38.40 Downtrend 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 Horizon Therapeutics Public Limited Company (NASDAQ: HZNP)

Sector: Healthcare | Drug Manufacturers – General

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 HZNP is if the stock breaks out of the falling wedge pattern, at a price of around $67.00. This is marked in the chart below as a green color dotted line.

Daily chart – HZNP

HZNP – Falling Wedge Pattern

#2 AbbVie Inc. (NYSE: ABBV)

Sector: Healthcare | Drug Manufacturers – General

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 ABBV is above the near-term resistance level of $146.00. This is marked in the chart below as a green color dotted line.

Daily chart – ABBV

ABBV – Flag Pattern Breakout

#3 America Movil, S.A.B. de C.V. (NYSE: AMX)

Sector: Communication Services | Telecom 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 daily chart shows that the stock is currently forming a downtrend channel. The ideal buy level for AMX is if the stock breaks out of the downtrend channel and has a daily close above $17.80. This is marked in the chart below as a green color dotted line.

Daily chart – AMX

AMX – Downtrend Channel

#4 Leslie’s, Inc. (NASDAQ: LESL)

Sector: Consumer Cyclical | Home Improvement Retail

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 LESL is if the stock breaks out of the falling wedge pattern, at a price of around $14.40. This is marked in the chart below as a green color dotted line.

Daily chart – LESL

LESL – Falling Wedge Pattern

#5 Eli Lilly and Company (NYSE: LLY)

Sector: Healthcare | Drug Manufacturers – General

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 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 LLY is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $315.50. This is marked in the chart below as a green color dotted line.

Daily chart – LLY

LLY – Symmetrical Triangle Pattern

#6 Freshpet, Inc. (NASDAQ: FRPT)

Sector: Consumer Defensive | Packaged Foods

Reason: Falling Wedge Pattern Breakout

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 stock has currently broken out of a falling wedge pattern. However, the ideal buy level for FRPT is above the nearest resistance level of $46.80. This is marked in the chart below as a green color dotted line.

Daily chart – FRPT

FRPT – Falling Wedge Pattern Breakout

#7 Maravai LifeSciences Holdings, Inc. (NASDAQ: MRVI)

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 daily chart shows that the stock is currently forming a downtrend channel. The ideal buy level for MRVI is if the stock breaks out of the downtrend channel and has a daily close above $26.80. This is marked in the chart below as a green color dotted line.

Daily chart – MRVI

MRVI – Downtrend Channel

#8 Vertical Aerospace Ltd. (NYSE: EVTL)

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 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 EVTL is if the stock closes above the immediate resistance level of $8.50. This is marked in the chart below as a green color dotted line.

Daily chart – EVTL

EVTL – Symmetrical Triangle Pattern Breakout

#9 Abercrombie & Fitch Co. (NYSE: ANF)

Sector: Consumer Cyclical | Apparel Retail

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 ANF is if the stock breaks out of the falling wedge pattern, at a price of around $16.60. This is marked in the chart below as a green color dotted line.

Daily chart – ANF

ANF – Falling Wedge Pattern

#10 Envista Holdings Corporation (NYSE: NVST)

Sector: Healthcare | Medical Instruments & Supplies

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 daily chart shows that the stock is currently forming a downtrend channel. The ideal buy level for NVST is if the stock breaks out of the downtrend channel and has a daily close above $38.40. This is marked in the chart below as a green color dotted line.

Daily chart – NVST

NVST – Downtrend Channel

Happy Trading!

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