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, here are 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 | Comstock Resources, Inc. | NYSE: CRK | $21.69 | $22.20 | Symmetrical Triangle Pattern |
| 2 | H&R Block Inc. | NYSE: HRB | $31.79 | $33.20 | Downtrend Channel |
| 3 | Planet Labs PBC | NYSE: PL | $33.83 | $34.10 | Symmetrical Triangle Pattern Breakout |
| 4 | Truist Financial Corporation | NYSE: TFC | $44.16 | $44.60 | Falling Wedge Pattern |
| 5 | Diversified Energy Co. | NYSE: DEC | $16.25 | $16.50 | Symmetrical Triangle Pattern Breakout |
| 6 | AT&T, Inc. | NYSE: T | $28.31 | $28.50 | Flag Pattern |
| 7 | The Baldwin Insurance Group Inc. | NASDAQ: BWIN | $21.64 | $23.30 | Downtrend Channel |
| 8 | Arm Holdings plc. ADR | NASDAQ: ARM | $132.35 | $139.20 | Symmetrical Triangle Pattern Breakout |
| 9 | Crescent Energy Co. | NYSE: CRGY | $12.67 | $13.00 | Uptrend Channel |
| 10 | NextDecade Corporation | NASDAQ: NEXT | $7.33 | $7.40 | Downtrend Channel 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 Comstock Resources, Inc. (NYSE: CRK)
Sector: Energy • Oil & Gas E&P
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 CRK is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $22.20. This is marked in the chart below as a green color dotted line.
Daily chart – CRK
CRK – Symmetrical Triangle Pattern
#2 H&R Block Inc. (NYSE: HRB)
Sector: Consumer Cyclical • Personal Services
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 HRB is if the stock breaks out of the downtrend channel and has a daily close above $33.20. This is marked in the chart below as a green color dotted line.
Daily chart – HRB
HRB – Downtrend Channel
#3 Planet Labs PBC (NYSE: PL)
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 PL is if the stock closes above the immediate resistance level of $34.10. This is marked in the chart below as a green color dotted line.
Daily chart – PL
PL – Symmetrical Triangle Pattern Breakout
#4 Truist Financial Corporation (NYSE: TFC)
Sector: Financial • Banks – Regional
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 TFC is if the stock breaks out of the falling wedge pattern, at a price of around $44.60. This is marked in the chart below as a green color dotted line.
Daily chart – TFC
TFC – Falling Wedge Pattern
#5 Diversified Energy Co. (NYSE: DEC)
Sector: Energy • Oil & Gas Integrated
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 DEC is if the stock closes above the immediate resistance level of $16.50. This is marked in the chart below as a green color dotted line.
Daily chart – DEC
DEC – Symmetrical Triangle Pattern Breakout
#6 AT&T, Inc. (NYSE: T)
Sector: Communication Services • Telecom Services
Reason: Formation of 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): The ideal buy level for T is if the stock breaks out of the flag pattern, at around $28.50. This is marked in the chart below as a green color dotted line.
Daily chart – T
T – Flag Pattern
#7 The Baldwin Insurance Group Inc. (NASDAQ: BWIN)
Sector: Financial • Insurance Brokers
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 BWIN is if the stock breaks out of the downtrend channel and has a daily close above $23.30. This is marked in the chart below as a green color dotted line.
Daily chart – BWIN
BWIN – Downtrend Channel
#8 Arm Holdings plc. ADR (NASDAQ: ARM)
Sector: Technology • Semiconductors
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 ARM is if the stock closes above the immediate resistance level of $139.20. This is marked in the chart below as a green color dotted line.
Daily chart – ARM
ARM – Symmetrical Triangle Pattern Breakout
#9 Crescent Energy Co. (NYSE: CRGY)
Sector: Energy • Oil & Gas E&P
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 CRGY is if the stock breaks out of the uptrend channel and has a daily close above $13.00. This is marked in the chart below as a green color dotted line.
Daily chart – CRGY
CRGY – Uptrend Channel
#10 NextDecade Corporation (NASDAQ: NEXT)
Sector: Energy • Oil & Gas Equipment & Services
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 NEXT is if the stock has a daily close above $7.40. This is marked in the chart below as a green color dotted line.
Daily chart – NEXT
NEXT – Downtrend Channel Breakout
Happy Trading!
Trades of The Day Research Team