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 | Roblox Corporation | NYSE: RBLX | $87.28 | $91.60 | Falling Wedge Pattern Breakout |
| 2 | Galaxy Digital Inc. | NASDAQ: GLXY | $34.31 | $34.65 | Symmetrical Triangle Pattern Breakout |
| 3 | Super Micro Computer Inc. | NASDAQ: SMCI | $32.64 | $33.10 | Falling Wedge Pattern Breakout |
| 4 | Exxon Mobil Corp. | NYSE: XOM | $129.88 | $130.30 | Uptrend Channel Breakout |
| 5 | Chewy Inc. | NYSE: CHWY | $33.74 | $34.40 | Falling Wedge Pattern |
| 6 | Novo Nordisk ADR. | NYSE: NVO | $62.33 | $62.40 | Falling Wedge Pattern Breakout |
| 7 | Riot Platforms Inc. | NASDAQ: RIOT | $19.24 | $19.50 | Symmetrical Triangle Pattern Breakout |
| 8 | Walmart Inc. | NASDAQ: WMT | $119.70 | $120.50 | Uptrend Channel |
| 9 | Redwire Corporation | NYSE: RDW | $11.71 | $12.00 | Falling Wedge Pattern Breakout |
| 10 | Rithm Capital Corporation | NYSE: RITM | $11.76 | $11.80 | 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 Roblox Corporation (NYSE: RBLX)
Sector: Communication Services • Electronic Gaming & Multimedia
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 RBLX is above the nearest resistance level of $91.60. This is marked in the chart below as a green color dotted line.
Daily chart – RBLX
RBLX – Falling Wedge Pattern Breakout
#2 Galaxy Digital Inc. (NASDAQ: GLXY)
Sector: Financial • Capital Markets
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 GLXY is if the stock closes above the immediate resistance level of $34.65. This is marked in the chart below as a green color dotted line.
Daily chart – GLXY
GLXY – Symmetrical Triangle Pattern Breakout
#3 Super Micro Computer Inc. (NASDAQ: SMCI)
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 SMCI is above the nearest resistance level of $33.10. This is marked in the chart below as a green color dotted line.
Daily chart – SMCI
SMCI – Falling Wedge Pattern Breakout
#4 Exxon Mobil Corp. (NYSE: XOM)
Sector: Energy • Oil & Gas Integrated
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 XOM is if the stock has a daily close above the near-term resistance level of $130.30. This is marked in the chart below as a green color dotted line.
Daily chart – XOM
XOM – Uptrend Channel Breakout
#5 Chewy Inc. (NYSE: CHWY)
Sector: Consumer Cyclical • Internet Retail
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 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 ideal buy level for CHWY is if the stock breaks out of the falling wedge pattern, at a price of around $34.40. This is marked in the chart below as a green color dotted line.
Daily chart – CHWY
CHWY – Falling Wedge Pattern
#6 Novo Nordisk ADR. (NYSE: NVO)
Sector: Healthcare • Drug Manufacturers – General
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 NVO is above the nearest resistance level of $62.40. This is marked in the chart below as a green color dotted line.
Daily chart – NVO
NVO – Falling Wedge Pattern Breakout
#7 Riot Platforms Inc. (NASDAQ: RIOT)
Sector: Financial • Capital Markets
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 RIOT is if the stock closes above the immediate resistance level of $19.50. This is marked in the chart below as a green color dotted line.
Daily chart – RIOT
RIOT – Symmetrical Triangle Pattern Breakout
#8 Walmart Inc. (NASDAQ: WMT)
Sector: Consumer Defensive • Discount Stores
Reason: Formation of 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 ideal buy level for WMT is if the stock breaks out of the uptrend channel and has a daily close above $120.50. This is marked in the chart below as a green color dotted line.
Daily chart – WMT
WMT – Uptrend Channel
#9 Redwire Corporation (NYSE: RDW)
Sector: Industrials • Aerospace & Defense
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 RDW is above the nearest resistance level of $12.00. This is marked in the chart below as a green color dotted line.
Daily chart – RDW
RDW – Falling Wedge Pattern Breakout
#10 Rithm Capital Corporation (NYSE: RITM)
Sector: Real Estate • REIT – Mortgage
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 RITM 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 – RITM
RITM – Symmetrical Triangle Pattern Breakout
Happy Trading!
Trades of The Day Research Team
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