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 | Valero Energy Corporation | NYSE: VLO | $142.06 | $143.50 | Symmetrical Triangle Pattern Breakout |
| 2 | Delek US Holdings, Inc. | NYSE: DK | $30.71 | $30.80 | Ascending Triangle Pattern Breakout |
| 3 | WestRock Company | NYSE: WRK | $34.57 | $34.80 | Symmetrical Triangle Pattern Breakout |
| 4 | DraftKings Inc. | NASDAQ: DKNG | $31.85 | $32.40 | Flag Pattern Breakout |
| 5 | The Western Union Company | NYSE: WU | $12.78 | $12.90 | Symmetrical Triangle Pattern Breakout |
| 6 | Roivant Sciences Ltd. | NASDAQ: ROIV | $12.60 | $12.70 | Ascending Triangle Pattern Breakout |
| 7 | GSK plc | NYSE: GSK | $36.55 | $36.80 | Symmetrical Triangle Pattern Breakout |
| 8 | Halliburton Company | NYSE: HAL | $41.28 | $42.00 | Symmetrical Triangle Pattern Breakout |
| 9 | Duke Energy Corporation | NYSE: DUK | $91.02 | $93.00 | Falling Wedge Pattern |
| 10 | NRG Energy, Inc. | NYSE: NRG | $39.51 | $39.80 | 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 Valero Energy Corporation (NYSE: VLO)
Sector: Energy | Oil & Gas Refining & Marketing
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 VLO is if the stock closes above the immediate resistance level of $143.50. This is marked in the chart below as a green color dotted line.
Daily chart – VLO
VLO – Symmetrical Triangle Pattern Breakout
#2 Delek US Holdings, Inc. (NYSE: DK)
Sector: Energy | Oil & Gas Refining & Marketing
Reason: Breakout From 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): Although the stock has broken out of the ascending triangle pattern, the ideal buy level for DK is if the stock has a daily close above the near-term resistance level of $30.80. This is marked in the chart below as a green color dotted line.
Daily chart – DK
DK – Ascending Triangle Pattern Breakout
#3 WestRock Company (NYSE: WRK)
Sector: Consumer Cyclical | Packaging & Containers
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 WRK is if the stock closes above the immediate resistance level of $34.80. This is marked in the chart below as a green color dotted line.
Daily chart – WRK
WRK – Symmetrical Triangle Pattern Breakout
#4 DraftKings Inc. (NASDAQ: DKNG)
Sector: Consumer Cyclical | Gambling
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 DKNG is above the near-term resistance level of $32.40. This is marked in the chart below as a green color dotted line.
Daily chart – DKNG
DKNG – Flag Pattern Breakout
#5 The Western Union Company (NYSE: WU)
Sector: Financial | Credit 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 WU is if the stock closes above the immediate resistance level of $12.90. This is marked in the chart below as a green color dotted line.
Daily chart – WU
WU – Symmetrical Triangle Pattern Breakout
#6 Roivant Sciences Ltd. (NASDAQ: ROIV)
Sector: Healthcare | Biotechnology
Reason: Breakout From 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): Although the stock has broken out of the ascending triangle pattern, the ideal buy level for ROIV is if the stock has a daily close above the near-term resistance level of $12.70. This is marked in the chart below as a green color dotted line.
Daily chart – ROIV
ROIV – Ascending Triangle Pattern Breakout
#7 GSK plc (NYSE: GSK)
Sector: Healthcare | Drug Manufacturers – General
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 GSK is if the stock closes above the immediate resistance level of $36.80. This is marked in the chart below as a green color dotted line.
Daily chart – GSK
GSK – Symmetrical Triangle Pattern Breakout
#8 Halliburton Company (NYSE: HAL)
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 HAL is if the stock closes above the immediate resistance level of $42.00. This is marked in the chart below as a green color dotted line.
Daily chart – HAL
HAL – Symmetrical Triangle Pattern Breakout
#9 Duke Energy Corporation (NYSE: DUK)
Sector: Utilities | Utilities – Regulated Electric
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 DUK is if the stock breaks out of the falling wedge pattern, at a price of around $93.00. This is marked in the chart below as a green color dotted line.
Daily chart – DUK
DUK – Falling Wedge Pattern
#10 NRG Energy, Inc. (NYSE: NRG)
Sector: Utilities | Utilities – Independent Power Producers
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 NRG is if the stock closes above the immediate resistance level of $39.80. This is marked in the chart below as a green color dotted line.
Daily chart – NRG
NRG – Symmetrical Triangle Pattern Breakout
Happy Trading!
Trades of The Day Research Team