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 | Snap Inc. | NYSE: SNAP | $12.47 | $13.00 | Symmetrical Triangle Pattern |
| 2 | Royalty Pharma plc | NASDAQ: RPRX | $29.49 | $30.00 | Falling Wedge Pattern Breakout |
| 3 | Nebius Group N.V | NASDAQ: NBIS | $33.18 | $34.00 | Symmetrical Triangle Pattern |
| 4 | Frontline Plc | NYSE: FRO | $17.23 | $18.10 | Falling Wedge Pattern Breakout |
| 5 | Constellation Energy Corporation | NASDAQ: CEG | $305.19 | $306.30 | Symmetrical Triangle Pattern Breakout |
| 6 | Arhaus Inc. | NASDAQ: ARHS | $10.88 | $11.40 | Falling Wedge Pattern Breakout |
| 7 | Intra-Cellular Therapies Inc. | NASDAQ: ITCI | $94.87 | $95.40 | Symmetrical Triangle Pattern Breakout |
| 8 | Delta Air Lines, Inc. | NYSE: DAL | $66.95 | $68.30 | Flag Pattern Breakout |
| 9 | SpringWorks Therapeutics Inc. | NASDAQ: SWTX | $43.00 | $44.00 | Symmetrical Triangle Pattern Breakout |
| 10 | Archer Daniels Midland Co | NYSE: ADM | $51.09 | $51.50 | 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 Snap Inc. (NYSE: SNAP)
Sector: Communication Services • Internet Content & Information
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 SNAP is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $13.00. This is marked in the chart below as a green color dotted line.
Daily chart – SNAP
SNAP – Symmetrical Triangle Pattern
#2 Royalty Pharma plc (NASDAQ: RPRX)
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 RPRX is above the nearest resistance level of $30.00. This is marked in the chart below as a green color dotted line.
Daily chart – RPRX
RPRX – Falling Wedge Pattern Breakout
#3 Nebius Group N.V (NASDAQ: NBIS)
Sector: Technology • Software – Infrastructure
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 NBIS is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $34.00. This is marked in the chart below as a green color dotted line.
Daily chart – NBIS
NBIS – Symmetrical Triangle Pattern
#4 Frontline Plc (NYSE: FRO)
Sector: Energy • Oil & Gas Midstream
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 FRO is above the nearest resistance level of $18.10. This is marked in the chart below as a green color dotted line.
Daily chart – FRO
FRO – Falling Wedge Pattern Breakout
#5 Constellation Energy Corporation (NASDAQ: CEG)
Sector: Utilities • Utilities – Renewable
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 CEG is if the stock closes above the immediate resistance level of $306.30. This is marked in the chart below as a green color dotted line.
Daily chart – CEG
CEG – Symmetrical Triangle Pattern Breakout
#6 Arhaus Inc. (NASDAQ: ARHS)
Sector: Consumer Cyclical • Home Improvement Retail
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 ARHS is above the nearest resistance level of $11.40. This is marked in the chart below as a green color dotted line.
Daily chart – ARHS
ARHS – Falling Wedge Pattern Breakout
#7 Intra-Cellular Therapies Inc. (NASDAQ: ITCI)
Sector: Healthcare • Drug Manufacturers – Specialty & Generic
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 ITCI is if the stock closes above the immediate resistance level of $95.40. This is marked in the chart below as a green color dotted line.
Daily chart – ITCI
ITCI – Symmetrical Triangle Pattern Breakout
#8 Delta Air Lines, Inc. (NYSE: DAL)
Sector: Industrials • Airlines
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 DAL is above the near-term resistance level of $68.30. This is marked in the chart below as a green color dotted line.
Daily chart – DAL
DAL – Flag Pattern Breakout
#9 SpringWorks Therapeutics Inc. (NASDAQ: SWTX)
Sector: Healthcare • Biotechnology
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 SWTX is if the stock closes above the immediate resistance level of $44.00. This is marked in the chart below as a green color dotted line.
Daily chart – SWTX
SWTX – Symmetrical Triangle Pattern Breakout
#10 Archer Daniels Midland Co (NYSE: ADM)
Sector: Consumer Defensive • Farm Products
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 ADM is above the nearest resistance level of $51.50. This is marked in the chart below as a green color dotted line.
Daily chart – ADM
ADM – Falling Wedge Pattern Breakout
Happy Trading!
Trades of The Day Research Team
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