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 | Rumble Inc. | NASDAQ: RUM | $8.41 | $8.60 | Symmetrical Triangle Pattern Breakout |
| 2 | Nano X Imaging Ltd | NASDAQ: NNOX | $7.97 | $8.35 | Falling Wedge Pattern Breakout |
| 3 | Hewlett Packard Enterprise Co. | NYSE: HPE | $23.95 | $24.15 | Ascending Triangle Pattern Breakout |
| 4 | Fastly Inc. | NYSE: FSLY | $10.90 | $11.40 | Symmetrical Triangle Pattern Breakout |
| 5 | DocuSign Inc. | NASDAQ: DOCU | $106.99 | $109.70 | Rising Wedge Pattern Breakout |
| 6 | Workday Inc. | NASDAQ: WDAY | $266.42 | $273.20 | Symmetrical Triangle Pattern |
| 7 | Ginkgo Bioworks Holdings Inc. | NYSE: DNA | $11.66 | $12.00 | Downtrend Channel Breakout |
| 8 | Perpetua Resources Corp | NASDAQ: PPTA | $12.24 | $12.70 | Ascending Triangle Pattern Breakout |
| 9 | Teradyne, Inc. | NASDAQ: TER | $118.51 | $120.20 | Falling Wedge Pattern |
| 10 | Ouster Inc. | NYSE: OUST | $10.39 | $11.40 | 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 Rumble Inc. (NASDAQ: RUM)
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 RUM 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 – RUM
RUM – Symmetrical Triangle Pattern Breakout
#2 Nano X Imaging Ltd (NASDAQ: NNOX)
Sector: Healthcare • Medical Devices
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 NNOX is above the nearest resistance level of $8.35. This is marked in the chart below as a green color dotted line.
Daily chart – NNOX
NNOX – Falling Wedge Pattern Breakout
#3 Hewlett Packard Enterprise Co. (NYSE: HPE)
Sector: Technology • Communication Equipment
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 HPW is if the stock has a daily close above the near-term resistance level of $24.15. This is marked in the chart below as a green color dotted line.
Daily chart – HPE
HPE – Ascending Triangle Pattern Breakout
#4 Fastly Inc. (NYSE: FSLY)
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 FSLY is if the stock closes above the immediate resistance level of $11.40. This is marked in the chart below as a green color dotted line.
Daily chart – FSLY
FSLY – Symmetrical Triangle Pattern Breakout
#5 DocuSign Inc. (NASDAQ: DOCU)
Sector: Technology • Software – Application
Reason: Rising Wedge Pattern Breakout
A rising wedge pattern is formed by joining two upward-sloping, converging trendlines having a contracting range. The pattern appears to be wide at the bottom and continues to contract as prices rise. A breakout from a rising wedge pattern with a high volume can indicate continuation.
Buy Level(s): Though the stock has currently broken out of a rising wedge pattern, the ideal buy level for DOCU is above the nearest resistance level of $109.70. This is marked in the chart below as a green color dotted line.
Daily chart – DOCU
DOCU – Rising Wedge Pattern Breakout
#6 Workday Inc. (NASDAQ: WDAY)
Sector: Technology • Software – Application
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 WDAY is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $273.20. This is marked in the chart below as a green color dotted line.
Daily chart – WDAY
WDAY – Symmetrical Triangle Pattern
#7 Ginkgo Bioworks Holdings Inc. (NYSE: DNA)
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 DNA is if the stock has a daily close above $12.00. This is marked in the chart below as a green color dotted line.
Daily chart – DNA
DNA – Downtrend Channel Breakout
#8 Perpetua Resources Corp (NASDAQ: PPTA)
Sector: Basic Materials • Other Precious Metals & Mining
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 PPTA 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 – PPTA
PPTA – Ascending Triangle Pattern Breakout
#9 Teradyne, Inc. (NASDAQ: TER)
Sector: Technology • Semiconductor Equipment & Materials
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 TER is if the stock breaks out of the falling wedge pattern, at a price of around $120.20. This is marked in the chart below as a green color dotted line.
Daily chart – TER
TER – Falling Wedge Pattern
#10 Ouster Inc. (NYSE: OUST)
Sector: Technology • Electronic Components
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 OUST is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $11.40. This is marked in the chart below as a green color dotted line.
Daily chart – OUST
OUST – Symmetrical Triangle Pattern
Happy Trading!
Trades of The Day Research Team
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