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 | Amazon.com Inc. | NASDAQ: AMZN | $193.06 | $195.70 | Falling Wedge Pattern Breakout |
| 2 | Gogo Inc. | NASDAQ: GOGO | $11.00 | $11.20 | Breakout From Consolidation Area |
| 3 | MARA Holdings Inc. | NASDAQ: MARA | $15.76 | $16.10 | Falling Wedge Pattern Breakout |
| 4 | Rumble Inc. | NASDAQ: RUM | $9.30 | $10.00 | Symmetrical Triangle Pattern Breakout |
| 5 | Advanced Micro Devices Inc. | NASDAQ: AMD | $102.84 | $107.60 | Downtrend Channel Breakout |
| 6 | Enphase Energy Inc. | NASDAQ: ENPH | $50.78 | $55.80 | Falling Wedge Pattern |
| 7 | TaskUs Inc. | NASDAQ: TASK | $16.85 | $17.20 | Symmetrical Triangle Pattern Breakout |
| 8 | First Solar Inc. | NASDAQ: FSLR | $140.68 | $143.00 | Downtrend Channel Breakout |
| 9 | Serve Robotics Inc. | NASDAQ: SERV | $7.46 | $8.00 | Falling Wedge Pattern Breakout |
| 10 | Lyft Inc. | NASDAQ: LYFT | $16.65 | $16.90 | Downtrend Channel 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 Amazon.com Inc. (NASDAQ: AMZN)
Sector: Consumer Cyclical • Internet 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 a reversal or a 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 AMZN is above the nearest resistance level of $195.70. This is marked in the chart below as a green color dotted line.
Daily chart – AMZN
AMZN – Falling Wedge Pattern Breakout
#2 Gogo Inc. (NASDAQ: GOGO)
Sector: Communication Services • Telecom Services
Reason: Breakout From 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): Although the stock has currently broken out of a consolidation area, the ideal buy level for GOGO is above the near-term resistance area, which translates to a price of around $11.20. This is marked in the chart below as a green color dotted line.
Daily chart – GOGO
GOGO – Breakout From Consolidation Area
#3 MARA Holdings Inc. (NASDAQ: MARA)
Sector: Financial • Capital Markets
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 a reversal or a 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 MARA is above the nearest resistance level of $16.10. This is marked in the chart below as a green color dotted line.
Daily chart – MARA
MARA – Falling Wedge Pattern Breakout
#4 Rumble Inc. (NASDAQ: RUM)
Sector: Communication Services • Internet Content & Information
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 $10.00. This is marked in the chart below as a green color dotted line.
Daily chart – RUM
RUM – Symmetrical Triangle Pattern Breakout
#5 Advanced Micro Devices Inc. (NASDAQ: AMD)
Sector: Technology • Semiconductors
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 AMD is if the stock has a daily close above $107.60. This is marked in the chart below as a green color dotted line.
Daily chart – AMD
AMD – Downtrend Channel Breakout
#6 Enphase Energy Inc. (NASDAQ: ENPH)
Sector: Technology • Solar
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 a reversal or a 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 ENPH is if the stock breaks out of the falling wedge pattern, at a price of around $55.80. This is marked in the chart below as a green color dotted line.
Daily chart – ENPH
ENPH – Falling Wedge Pattern
#7 TaskUs Inc. (NASDAQ: TASK)
Sector: Technology • Information Technology 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 TASK is if the stock closes above the immediate resistance level of $17.20. This is marked in the chart below as a green color dotted line.
Daily chart – TASK
TASK – Symmetrical Triangle Pattern Breakout
#8 First Solar Inc. (NASDAQ: FSLR)
Sector: Technology • Solar
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 FSLR is if the stock has a daily close above $143.00. This is marked in the chart below as a green color dotted line.
Daily chart – FSLR
FSLR – Downtrend Channel Breakout
#9 Serve Robotics Inc. (NASDAQ: SERV)
Sector: Industrials • Specialty Industrial Machinery
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 a reversal or a 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 SERV is above the nearest resistance level of $8.00. This is marked in the chart below as a green color dotted line.
Daily chart – SERV
SERV – Falling Wedge Pattern Breakout
#10 Lyft Inc. (NASDAQ: LYFT)
Sector: Technology • Software – Application
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 LYFT is if the stock has a daily close above $16.90. This is marked in the chart below as a green color dotted line.
Daily chart – LYFT
LYFT – Downtrend Channel Breakout
Happy Trading!
Trades of The Day Research Team
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