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 | RPC, Inc. | NYSE: RES | $8.12 | $8.60 | Symmetrical Triangle Pattern Breakout |
| 2 | ConocoPhillips | NYSE: COP | $118.51 | $122.60 | Ascending Triangle Pattern |
| 3 | Wynn Resorts, Limited | NASDAQ: WYNN | $73.09 | $74.40 | Downtrend Channel Breakout |
| 4 | APA Corporation | NASDAQ: APA | $42.52 | $44.50 | Symmetrical Triangle Pattern Breakout |
| 5 | Halliburton Company | NYSE: HAL | $30.41 | $30.70 | Falling Wedge Pattern Breakout |
| 6 | The Gap, Inc. | NYSE: GPS | $9.72 | $11.60 | Downtrend Channel |
| 7 | Schlumberger Limited | NYSE: SLB | $42.59 | $43.70 | Symmetrical Triangle Pattern Breakout |
| 8 | Exxon Mobil Corporation | NYSE: XOM | $101.30 | $104.80 | Flag Pattern Breakout |
| 9 | Inventiva S.A. | NASDAQ: IVA | $7.05 | $7.10 | Downtrend Channel Breakout |
| 10 | StoneCo Ltd. | NASDAQ: STNE | $11.64 | $12.20 | Symmetrical Triangle Pattern 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 RPC, Inc. (NYSE: RES)
Sector: Energy | Oil & Gas Equipment & Services
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 RES is if the stock closes above the immediate resistance level of $8.60. This is marked in the chart below as a green color dotted line.
Daily chart – RES
RES – Symmetrical Triangle Pattern Breakout
#2 ConocoPhillips (NYSE: COP)
Sector: Energy | Oil & Gas E&P
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 COP is if the stock breaks out of the ascending triangle pattern and has a daily close above the near-term resistance level of $122.60. This is marked in the chart below as a green color dotted line.
Daily chart – COP
COP – Ascending Triangle Pattern
#3 Wynn Resorts, Limited (NASDAQ: WYNN)
Sector: Consumer Cyclical | Resorts & Casinos
Reason: Downtrend Channel 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 WYNN is if the stock has a daily close above $74.40. This is marked in the chart below as a green color dotted line.
Daily chart – WYNN
WYNN – Downtrend Channel Breakout
#4 APA Corporation (NASDAQ: APA)
Sector: Energy | Oil & Gas E&P
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 APA is if the stock closes above the immediate resistance level of $44.50. This is marked in the chart below as a green color dotted line.
Daily chart – APA
APA – Symmetrical Triangle Pattern Breakout
#5 Halliburton Company (NYSE: HAL)
Sector: Energy | Oil & Gas Equipment & Services
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 HAL is above the nearest resistance level of $30.70. This is marked in the chart below as a green color dotted line.
Daily chart – HAL
HAL – Falling Wedge Pattern Breakout
#6 The Gap, Inc. (NYSE: GPS)
Sector: Consumer Cyclical | Apparel 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 daily chart shows that the stock is currently forming a downtrend channel. The ideal buy level for GPS is if the stock breaks out of the downtrend channel and has a daily close above $11.60. This is marked in the chart below as a green color dotted line.
Daily chart – GPS
GPS – Downtrend Channel
#7 Schlumberger Limited (NYSE: SLB)
Sector: Energy | Oil & Gas Equipment & Services
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 SLB is if the stock closes above the immediate resistance level of $43.70. This is marked in the chart below as a green color dotted line.
Daily chart – SLB
SLB – Symmetrical Triangle Pattern Breakout
#8 Exxon Mobil Corporation (NYSE: XOM)
Sector: Energy | Oil & Gas Integrated
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 XOM is above the near-term resistance level of $104.80. This is marked in the chart below as a green color dotted line.
Daily chart – XOM
XOM – Flag Pattern Breakout
#9 Inventiva S.A. (NASDAQ: IVA)
Sector: Healthcare | Biotechnology
Reason: Downtrend Channel 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 IVA is if the stock has a daily close above $7.10. This is marked in the chart below as a green color dotted line.
Daily chart – IVA
IVA – Downtrend Channel Breakout
#10 StoneCo Ltd. (NASDAQ: STNE)
Sector: Technology | Software – Application
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 STNE is if the stock closes above the immediate resistance level of $12.20. This is marked in the chart below as a green color dotted line.
Daily chart – STNE
STNE – Symmetrical Triangle Pattern Breakout
Happy Trading!
Trades of The Day Research Team
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