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 | Coinbase Global Inc. | NASDAQ: COIN | $380.02 | $380.50 | Flag Pattern Breakout |
| 2 | AST SpaceMobile Inc. | NASDAQ: ASTS | $67.76 | $68.60 | Symmetrical Triangle Pattern Breakout |
| 3 | Teladoc Health Inc. | NYSE: TDOC | $9.01 | $9.40 | Consolidation Area |
| 4 | QuantumScape Corp. | NYSE: QS | $15.92 | $16.50 | Ascending Triangle Pattern Breakout |
| 5 | McEwen Inc. | NYSE: MUX | $17.41 | $17.60 | Uptrend Channel Breakout |
| 6 | Alto Neuroscience Inc. | NYSE: ANRO | $6.89 | $8.00 | Symmetrical Triangle Pattern Breakout |
| 7 | Rumble Inc. | NASDAQ: RUM | $8.56 | $9.00 | Falling Wedge Pattern Breakout |
| 8 | Archer Aviation Inc. | NYSE: ACHR | $11.57 | $12.20 | Symmetrical Triangle Pattern Breakout |
| 9 | NioCorp Developments Ltd | NASDAQ: NB | $7.94 | $8.20 | Uptrend Channel Breakout |
| 10 | Immunovant Inc. | NASDAQ: IMVT | $16.90 | $17.30 | Symmetrical Triangle 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 Coinbase Global Inc. (NASDAQ: COIN)
Sector: Financial • Financial Data & Stock Exchanges
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 COIN is above the near-term resistance level of $380.50. This is marked in the chart below as a green color dotted line.
Daily chart – COIN
COIN – Flag Pattern Breakout
#2 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 $68.60. This is marked in the chart below as a green color dotted line.
Daily chart – ASTS
ASTS – Symmetrical Triangle Pattern Breakout
#3 Teladoc Health Inc. (NYSE: TDOC)
Sector: Healthcare • Health Information Services
Reason: Formation of 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): The ideal buy level for TDOC is above the breakout level of the consolidation area, at around $9.40. This is marked in the chart below as a green color dotted line.
Daily chart – TDOC
TDOC – Consolidation Area
#4 QuantumScape Corp. (NYSE: QS)
Sector: Consumer Cyclical • Auto Parts
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 QS is if the stock has a daily close above the near-term resistance level of $16.50. This is marked in the chart below as a green color dotted line.
Daily chart – QS
QS – Ascending Triangle Pattern Breakout
#5 McEwen Inc. (NYSE: MUX)
Sector: Basic Materials • Other Precious Metals & Mining
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 MUX is if the stock has a daily close above the near-term resistance level of $17.60. This is marked in the chart below as a green color dotted line.
Daily chart – MUX
MUX – Uptrend Channel Breakout
#6 Alto Neuroscience Inc. (NYSE: ANRO)
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 ANRO is if the stock closes above the immediate resistance level of $8.00. This is marked in the chart below as a green color dotted line.
Daily chart – ANRO
ANRO – Symmetrical Triangle Pattern Breakout
#7 Rumble Inc. (NASDAQ: RUM)
Sector: Communication Services • Internet Content & Information
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 RUM is above the nearest resistance level of $9.00. This is marked in the chart below as a green color dotted line.
Daily chart – RUM
RUM – Falling Wedge Pattern Breakout
#8 Archer Aviation Inc. (NYSE: ACHR)
Sector: Industrials • Aerospace & Defense
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 ACHR is if the stock closes above the immediate resistance level of $12.20. This is marked in the chart below as a green color dotted line.
Daily chart – ACHR
ACHR – Symmetrical Triangle Pattern Breakout
#9 NioCorp Developments Ltd (NASDAQ: NB)
Sector: Basic Materials • Other Industrial Metals & Mining
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 NB is if the stock has a daily close above the near-term resistance level of $8.20. This is marked in the chart below as a green color dotted line.
Daily chart – NB
NB – Uptrend Channel Breakout
#10 Immunovant Inc. (NASDAQ: IMVT)
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 IMVT is if the stock closes above the immediate resistance level of $17.30. This is marked in the chart below as a green color dotted line.
Daily chart – IMVT
IMVT – Symmetrical Triangle Pattern Breakout
Happy Trading!
Trades of The Day Research Team
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