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 | Las Vegas Sands Corp | NYSE: LVS | $51.12 | $51.70 | Downtrend Channel Breakout |
| 2 | Hallador Energy Co | NASDAQ: HNRG | $9.70 | $9.90 | Symmetrical Triangle Pattern Breakout |
| 3 | GigaCloud Technology Inc. | NASDAQ: GCT | $23.76 | $25.60 | Falling Wedge Pattern Breakout |
| 4 | Wynn Resorts Ltd. | NASDAQ: WYNN | $97.62 | $98.80 | Downtrend Channel Breakout |
| 5 | Trimble Inc. | NASDAQ: TRMB | $61.65 | $62.10 | Symmetrical Triangle Pattern Breakout |
| 6 | Canadian Natural Resources Ltd. | NYSE: CNQ | $44.89 | $48.90 | Downtrend Channel |
| 7 | TEGNA Inc. | NYSE: TGNA | $15.74 | $16.35 | Consolidation Area |
| 8 | XPeng Inc. ADR | NYSE: XPEV | $12.72 | $13.40 | Falling Wedge Pattern Breakout |
| 9 | Ermenegildo Zegna N.V. | NYSE: ZGN | $9.75 | $10.20 | Downtrend Channel |
| 10 | Coinbase Global Inc. | NASDAQ: COIN | $191.23 | $211.80 | Falling Wedge 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 Las Vegas Sands Corp (NYSE: LVS)
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 LVS is if the stock has a daily close above $51.70. This is marked in the chart below as a green color dotted line.
Daily chart – LVS
LVS – Downtrend Channel Breakout
#2 Hallador Energy Co (NASDAQ: HNRG)
Sector: Energy • Thermal Coal
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 HNRG is if the stock closes above the immediate resistance level of $9.90. This is marked in the chart below as a green color dotted line.
Daily chart – HNRG
HNRG – Symmetrical Triangle Pattern Breakout
#3 GigaCloud Technology Inc. (NASDAQ: GCT)
Sector: Technology • Software – Infrastructure
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 GCT is above the nearest resistance level of $25.60. This is marked in the chart below as a green color dotted line.
Daily chart – GCT
GCT – Falling Wedge Pattern Breakout
#4 Wynn Resorts Ltd. (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 $98.80. This is marked in the chart below as a green color dotted line.
Daily chart – WYNN
WYNN – Downtrend Channel Breakout
#5 Trimble Inc. (NASDAQ: TRMB)
Sector: Technology • Scientific & Technical Instruments
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 TRMB is if the stock closes above the immediate resistance level of $62.10. This is marked in the chart below as a green color dotted line.
Daily chart – TRMB
TRMB – Symmetrical Triangle Pattern Breakout
#6 Canadian Natural Resources Ltd. (NYSE: CNQ)
Sector: Energy • Oil & Gas E&P
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 CNQ is if the stock breaks out of the downtrend channel and has a daily close above $48.90. This is marked in the chart below as a green color dotted line.
Daily chart – CNQ
CNQ – Downtrend Channel
#7 TEGNA Inc. (NYSE: TGNA)
Sector: Communication Services • Broadcasting
Reason: Formation of a Consolidation Area in the Daily Chart
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 TGNA is above the breakout level of the consolidation area, at around $16.35. This is marked in the chart below as a green color dotted line.
Daily chart – TGNA
TGNA – Consolidation Area
#8 XPeng Inc. ADR (NYSE: XPEV)
Sector: Consumer Cyclical • Auto Manufacturers
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 XPEV is above the nearest resistance level of $13.40. This is marked in the chart below as a green color dotted line.
Daily chart – XPEV
XPEV – Falling Wedge Pattern Breakout
#9 Ermenegildo Zegna N.V. (NYSE: ZGN)
Sector: Consumer Cyclical • Apparel Manufacturing
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 ZGN is if the stock breaks out of the downtrend channel and has a daily close above $10.20. This is marked in the chart below as a green color dotted line.
Daily chart – ZGN
ZGN – Downtrend Channel
#10 Coinbase Global Inc. (NASDAQ: COIN)
Sector: Financial • Financial Data & Stock Exchanges
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 COIN is above the nearest resistance level of $211.80. This is marked in the chart below as a green color dotted line.
Daily chart – COIN
COIN – Falling Wedge Pattern Breakout
Happy Trading!
Trades of The Day Research Team
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