The Top 10 Stocks to Watch This Week for Possible Breakouts

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

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 Vertex Pharmaceuticals, Inc. (NASDAQ: VRTX)

Sector: Healthcare • Biotechnology

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 VRTX is if the stock breaks out of the uptrend channel and has a daily close above $502.80. This is marked in the chart below as a green color dotted line.

Daily chart – VRTX

VRTX – Uptrend Channel

#2 Applovin Corp. (NASDAQ: APP)

Sector: Communication Services • Advertising Agencies

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 APP is if the stock breaks out of the falling wedge pattern, at a price of around $405.50. This is marked in the chart below as a green color dotted line.

Daily chart – APP

APP – Falling Wedge Pattern

#3 International Flavors & Fragrances Inc. (NYSE: IFF)

Sector: Basic Materials • Specialty Chemicals

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 IFF is if the stock has a daily close above the near-term resistance level of $83.50. This is marked in the chart below as a green color dotted line.

Daily chart – IFF

IFF – Uptrend Channel Breakout

#4 Enbridge Inc. (NYSE: ENB)

Sector: Energy • Oil & Gas Midstream

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 ENB is if the stock closes above the immediate resistance level of $73.80. This is marked in the chart below as a green color dotted line.

Daily chart – ENB

ENB – Symmetrical Triangle Pattern Breakout

#5 Applied Materials Inc. (NASDAQ: AMAT)

Sector: Technology • Semiconductor Equipment & Materials

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 AMAT is if the stock breaks out of the uptrend channel and has a daily close above $361.60. This is marked in the chart below as a green color dotted line.

Daily chart – AMAT

AMAT – Uptrend Channel

#6 Rivian Automotive Inc. (NASDAQ: RIVN)

Sector: Consumer Cyclical • Auto Manufacturers

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 RIVN is if the stock closes above the immediate resistance level of $18.70. This is marked in the chart below as a green color dotted line.

Daily chart – RIVN

RIVN – Symmetrical Triangle Pattern Breakout

#7 Coinbase Global Inc. (NASDAQ: COIN)

Sector: Financial • Financial Data & Stock Exchanges

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 COIN is if the stock breaks out of the falling wedge pattern, at a price of around $169.70. This is marked in the chart below as a green color dotted line.

Daily chart – COIN

COIN – Falling Wedge Pattern

#8 Transocean Ltd (NYSE: RIG)

Sector: Energy • Oil & Gas Drilling

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 RIG is if the stock has a daily close above the near-term resistance level of $6.60. This is marked in the chart below as a green color dotted line.

Daily chart – RIG

RIG – Uptrend Channel Breakout

#9 Nebius Group N.V (NASDAQ: NBIS)

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 NBIS is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $100.60. This is marked in the chart below as a green color dotted line.

Daily chart – NBIS

NBIS – Symmetrical Triangle Pattern

#10 Viasat, Inc. (NASDAQ: VSAT)

Sector: Technology • Communication Equipment

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 VSAT is if the stock breaks out of the uptrend channel and has a daily close above $49.60. This is marked in the chart below as a green color dotted line.

Daily chart – VSAT

VSAT – Uptrend Channel

Happy Trading!

Trades of The Day Research Team