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 | Rocket Lab Corp | NASDAQ: RKLB | $28.92 | $29.70 | Symmetrical Triangle Pattern |
| 2 | Unusual Machines Inc. | AMEX: UMAC | $7.42 | $8.00 | Falling Wedge Pattern Breakout |
| 3 | INmune Bio Inc. | NASDAQ: INMB | $7.62 | $7.85 | Symmetrical Triangle Pattern |
| 4 | Palladyne AI Corp. | NASDAQ: PDYN | $9.59 | $10.30 | Downtrend Channel Breakout |
| 5 | Provident Bancorp Inc. | NASDAQ: PVBC | $11.74 | $11.80 | Symmetrical Triangle Pattern Breakout |
| 6 | QXO Inc. | NYSE: QXO | $19.00 | $19.20 | Breakout From Consolidation Area |
| 7 | AST SpaceMobile Inc. | NASDAQ: ASTS | $31.19 | $31.70 | Symmetrical Triangle Pattern Breakout |
| 8 | Phathom Pharmaceuticals Inc. | NASDAQ: PHAT | $8.92 | $9.00 | Falling Wedge Pattern Breakout |
| 9 | Red Cat Holdings Inc. | NASDAQ: RCAT | $8.16 | $8.90 | Symmetrical Triangle Pattern Breakout |
| 10 | Permian Resources Corp | NYSE: PR | $13.59 | $14.15 | Downtrend Channel |
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 Rocket Lab Corp (NASDAQ: RKLB)
Sector: Industrials • Aerospace & Defense
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 RKLB is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $29.70. This is marked in the chart below as a green color dotted line.
Daily chart – RKLB
RKLB – Symmetrical Triangle Pattern
#2 Unusual Machines Inc. (AMEX: UMAC)
Sector: Technology • Computer Hardware
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 UMAC is above the nearest resistance level of $8.00. This is marked in the chart below as a green color dotted line.
Daily chart – UMAC
UMAC – Falling Wedge Pattern Breakout
#3 INmune Bio Inc. (NASDAQ: INMB)
Sector: Healthcare • Biotechnology
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 INMB is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $7.85. This is marked in the chart below as a green color dotted line.
Daily chart – INMB
INMB – Symmetrical Triangle Pattern
#4 Palladyne AI Corp. (NASDAQ: PDYN)
Sector: Technology • Software – Infrastructure
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 PDYN is if the stock has a daily close above $10.30. This is marked in the chart below as a green color dotted line.
Daily chart – PDYN
PDYN – Downtrend Channel Breakout
#5 Provident Bancorp Inc. (NASDAQ: PVBC)
Sector: Financial • Banks – Regional
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 PVBC is if the stock closes above the immediate resistance level of $11.80. This is marked in the chart below as a green color dotted line.
Daily chart – PVBC
PVBC – Symmetrical Triangle Pattern Breakout
#6 QXO Inc. (NYSE: QXO)
Sector: Technology • Software – Application
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 QXO is above the near-term resistance area, which translates to a price of around $19.20. This is marked in the chart below as a green color dotted line.
Daily chart – QXO
QXO – Breakout From Consolidation Area
#7 AST SpaceMobile Inc. (NASDAQ: ASTS)
Sector: Technology • Communication Equipment
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 ASTS is if the stock closes above the immediate resistance level of $31.70. This is marked in the chart below as a green color dotted line.
Daily chart – ASTS
ASTS – Symmetrical Triangle Pattern Breakout
#8 Phathom Pharmaceuticals Inc. (NASDAQ: PHAT)
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 PHAT is above the nearest resistance level of $9.00. This is marked in the chart below as a green color dotted line.
Daily chart – PHAT
PHAT – Falling Wedge Pattern Breakout
#9 Red Cat Holdings Inc. (NASDAQ: RCAT)
Sector: Technology • Computer Hardware
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 RCAT is if the stock closes above the immediate resistance level of $8.90. This is marked in the chart below as a green color dotted line.
Daily chart – RCAT
RCAT – Symmetrical Triangle Pattern Breakout
#10 Permian Resources Corp (NYSE: PR)
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 PR is if the stock breaks out of the downtrend channel and has a daily close above $14.15. This is marked in the chart below as a green color dotted line.
Daily chart – PR
PR – Downtrend Channel
Happy Trading!
Trades of The Day Research Team
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