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 | Okta Inc. | NASDAQ: OKTA | $101.10 | $105.00 | Symmetrical Triangle Pattern Breakout |
| 2 | AES Corp | NYSE: AES | $13.80 | $14.00 | Downtrend Channel Breakout |
| 3 | Fortinet Inc. | NASDAQ: FTNT | $104.82 | $108.80 | Symmetrical Triangle Pattern |
| 4 | Newmont Corp | NYSE: NEM | $65.75 | $66.30 | Uptrend Channel Breakout |
| 5 | Vertiv Holdings Co | NYSE: VRT | $137.47 | $142.20 | Symmetrical Triangle Pattern Breakout |
| 6 | Coursera Inc. | NYSE: COUR | $12.37 | $12.50 | Breakout From Consolidation Area |
| 7 | Applied Optoelectronics Inc. | NASDAQ: AAOI | $27.13 | $30.50 | Symmetrical Triangle Pattern |
| 8 | First Horizon Corporation | NYSE: FHN | $22.81 | $23.00 | Ascending Triangle Pattern Breakout |
| 9 | Liberty Energy Inc. | NYSE: LBRT | $13.14 | $13.40 | Symmetrical Triangle Pattern Breakout |
| 10 | Tesla Inc. | NASDAQ: TSLA | $316.06 | $337.00 | 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 Okta Inc. (NASDAQ: OKTA)
Sector: Technology • Software – Infrastructure
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 OKTA is if the stock closes above the immediate resistance level of $105.00. This is marked in the chart below as a green color dotted line.
Daily chart – OKTA
OKTA – Symmetrical Triangle Pattern Breakout
#2 AES Corp (NYSE: AES)
Sector: Utilities • Utilities – Diversified
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 AES is if the stock has a daily close above $14.00. This is marked in the chart below as a green color dotted line.
Daily chart – AES
AES – Downtrend Channel Breakout
#3 Fortinet Inc. (NASDAQ: FTNT)
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 FTNT is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $108.80. This is marked in the chart below as a green color dotted line.
Daily chart – FTNT
FTNT – Symmetrical Triangle Pattern
#4 Newmont Corp (NYSE: NEM)
Sector: Basic Materials • Gold
Reason: Breakout From an Uptrend Channel
An uptrend channel or an ascending channel is the price action contained between upward sloping parallel lines. It is formed by a lower trend line that connects the swing lows, and an upper channel line that joins the swing highs. A stock usually trades between the two rails of the uptrend channel before finally breaking out from the upper rail.
Buy Level(s): The stock has currently broken out of the uptrend channel. However, the ideal buy level for NEM is if the stock has a daily close above the near-term resistance level of $66.30. This is marked in the chart below as a green color dotted line.
Daily chart – NEM
NEM – Uptrend Channel Breakout
#5 Vertiv Holdings Co (NYSE: VRT)
Sector: Industrials • Electrical Equipment & Parts
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 VRT is if the stock closes above the immediate resistance level of $142.20. This is marked in the chart below as a green color dotted line.
Daily chart – VRT
VRT – Symmetrical Triangle Pattern Breakout
#6 Coursera Inc. (NYSE: COUR)
Sector: Consumer Defensive • Education & Training 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 COUR is above the near-term resistance area, which translates to a price of around $12.50. This is marked in the chart below as a green color dotted line.
Daily chart – COUR
COUR – Breakout From Consolidation Area
#7 Applied Optoelectronics Inc. (NASDAQ: AAOI)
Sector: Technology • Communication Equipment
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 AAOI is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $30.50. This is marked in the chart below as a green color dotted line.
Daily chart – AAOI
AAOI – Symmetrical Triangle Pattern
#8 First Horizon Corporation (NYSE: FHN)
Sector: Financial • Banks – Regional
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 FHN is if the stock has a daily close above the near-term resistance level of $23.00. This is marked in the chart below as a green color dotted line.
Daily chart – FHN
FHN – Ascending Triangle Pattern Breakout
#9 Liberty Energy Inc. (NYSE: LBRT)
Sector: Energy • Oil & Gas Equipment & 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 LBRT is if the stock closes above the immediate resistance level of $13.40. This is marked in the chart below as a green color dotted line.
Daily chart – LBRT
LBRT – Symmetrical Triangle Pattern Breakout
#10 Tesla Inc. (NASDAQ: TSLA)
Sector: Consumer Cyclical • Auto Manufacturers
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 TSLA is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $337.00. This is marked in the chart below as a green color dotted line.
Daily chart – TSLA
TSLA – Symmetrical Triangle Pattern
Happy Trading!
Trades of The Day Research Team
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