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 | Trump Media & Technology Group Corp. | NASDAQ: DJT | $38.95 | $41.30 | Falling Wedge Pattern Breakout |
| 2 | Vista Energy S.A.B. de C.V ADR | NYSE: VIST | $52.93 | $53.40 | Symmetrical Triangle Pattern Breakout |
| 3 | Tapestry Inc. | NYSE: TPR | $50.49 | $51.00 | Ascending Triangle Pattern Breakout |
| 4 | Newell Brands Inc. | NASDAQ: NWL | $8.73 | $8.95 | Symmetrical Triangle Pattern Breakout |
| 5 | ImmunityBio Inc. | NASDAQ: IBRX | $5.32 | $5.60 | Falling Wedge Pattern Breakout |
| 6 | Saia Inc. | NASDAQ: SAIA | $461.65 | $473.00 | Symmetrical Triangle Pattern Breakout |
| 7 | Patterson-UTI Energy Inc. | NASDAQ: PTEN | $8.17 | $8.55 | Downtrend Channel |
| 8 | PENN Entertainment Inc. | NASDAQ: PENN | $19.91 | $20.10 | Symmetrical Triangle Pattern Breakout |
| 9 | Tesla Inc. | NASDAQ: TSLA | $269.19 | $271.00 | Ascending Triangle Pattern Breakout |
| 10 | Churchill Downs, Inc. | NASDAQ: CHDN | $140.25 | $141.00 | Symmetrical Triangle 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 Trump Media & Technology Group Corp. (NASDAQ: DJT)
Sector: Communication Services • Internet Content & Information
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 DJT is above the nearest resistance level of $41.30. This is marked in the chart below as a green color dotted line.
Daily chart – DJT
DJT – Falling Wedge Pattern Breakout
#2 Vista Energy S.A.B. de C.V ADR (NYSE: VIST)
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 VIST is if the stock closes above the immediate resistance level of $53.40. This is marked in the chart below as a green color dotted line.
Daily chart – VIST
VIST – Symmetrical Triangle Pattern Breakout
#3 Tapestry Inc. (NYSE: TPR)
Sector: Consumer Cyclical • Luxury Goods
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 TPR is if the stock has a daily close above the near-term resistance level of $51.00. This is marked in the chart below as a green color dotted line.
Daily chart – TPR
TPR – Ascending Triangle Pattern Breakout
#4 Newell Brands Inc. (NASDAQ: NWL)
Sector: Consumer Defensive • Household & Personal Products
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 NWL is if the stock closes above the immediate resistance level of $8.95. This is marked in the chart below as a green color dotted line.
Daily chart – NWL
NWL – Symmetrical Triangle Pattern Breakout
#5 ImmunityBio Inc. (NASDAQ: IBRX)
Sector: Healthcare • Biotechnology
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 IBRX is above the nearest resistance level of $5.60. This is marked in the chart below as a green color dotted line.
Daily chart – IBRX
IBRX – Falling Wedge Pattern Breakout
#6 Saia Inc. (NASDAQ: SAIA)
Sector: Industrials • Trucking
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 SAIA is if the stock closes above the immediate resistance level of $473.00. This is marked in the chart below as a green color dotted line.
Daily chart – SAIA
SAIA – Symmetrical Triangle Pattern Breakout
#7 Patterson-UTI Energy Inc. (NASDAQ: PTEN)
Sector: Energy • Oil & Gas Drilling
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 PTEN is if the stock breaks out of the downtrend channel and has a daily close above $8.55. This is marked in the chart below as a green color dotted line.
Daily chart – PTEN
PTEN – Downtrend Channel
#8 PENN Entertainment Inc. (NASDAQ: PENN)
Sector: Consumer Cyclical • Resorts & Casinos
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 PENN is if the stock closes above the immediate resistance level of $20.10. This is marked in the chart below as a green color dotted line.
Daily chart – PENN
PENN – Symmetrical Triangle Pattern Breakout
#9 Tesla Inc. (NASDAQ: TSLA)
Sector: Consumer Cyclical • Auto Manufacturers
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 TSLA is if the stock has a daily close above the near-term resistance level of $271.00. This is marked in the chart below as a green color dotted line.
Daily chart – TSLA
TSLA – Ascending Triangle Pattern Breakout
#10 Churchill Downs, Inc. (NASDAQ: CHDN)
Sector: Consumer Cyclical • Gambling
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 CHDN is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $141.00. This is marked in the chart below as a green color dotted line.
Daily chart – CHDN
CHDN – Symmetrical Triangle Pattern
Happy Trading!
Trades of The Day Research Team
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