Four of the ten setups on this week’s list are falling wedges — more than any other pattern on the table.
Add Nu Holdings, which is trying to break out of a downtrend channel, and half the list is built on patterns that only show up after a stock has already been falling. Albertsons, Phathom, Banco Santander Brasil, Build-A-Bear, and Nu — five names that spent recent weeks selling off and are now coiling to turn.
That gives this week a different character than a straight trend-continuation list. These aren’t stocks extending a move that’s already working; several are beaten-down names trying to put in a bottom and reverse. The payoff when a falling wedge resolves higher can be sharp — but so is the downside if the low doesn’t hold, which is exactly why the daily-close discipline matters more here, not less.
The other half leans the other way: Cisco riding a flag, Cheesecake Factory inside an uptrend channel, and three symmetrical triangles — Regions, Ovintiv, and Forte — waiting to pick a direction. Worth a note on the side: three of the ten are regional banks.
We’re watching for the turns to confirm before we trust them.
Here are the 10 stocks we’re watching this week, in no particular order.
| Sl # | Name of the Stock | Stock Ticker | Last Close | Buy Level(s) | Reason |
|---|---|---|---|---|---|
| 1 | Albertsons Companies Inc. | NYSE: ACI | $14.76 | $15.00 | Falling Wedge Pattern Breakout |
| 2 | Cheesecake Factory Inc. | NASDAQ: CAKE | $82.76 | $84.30 | Uptrend Channel |
| 3 | Phathom Pharmaceuticals Inc. | NASDAQ: PHAT | $12.61 | $13.00 | Falling Wedge Pattern Breakout |
| 4 | Regions Financial Corp. | NYSE: RF | $31.02 | $31.50 | Symmetrical Triangle Pattern Breakout |
| 5 | Banco Santander (Brasil) SA ADR | NYSE: BSBR | $5.39 | $5.70 | Falling Wedge Pattern |
| 6 | Cisco Systems Inc. | NASDAQ: CSCO | $121.31 | $122.70 | Flag Pattern Breakout |
| 7 | Ovintiv Inc. | NYSE: OVV | $55.53 | $57.50 | Symmetrical Triangle Pattern |
| 8 | Nu Holdings Ltd. | NYSE: NU | $13.76 | $14.40 | Downtrend Channel |
| 9 | Forte Biosciences Inc. | NASDAQ: FBRX | $43.92 | $45.50 | Symmetrical Triangle Pattern Breakout |
| 10 | Build A Bear Workshop Inc. | NYSE: BBW | $34.42 | $36.10 | Falling Wedge Pattern Breakout |
If needed, swipe or scroll sideways to view the full table.
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 Albertsons Companies Inc. (NYSE: ACI)
Sector: Consumer Defensive • Grocery Stores
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 ACI is above the nearest resistance level of $15.00. This is marked in the chart below as a green color dotted line.
Daily chart – ACI
ACI – Falling Wedge Pattern Breakout
#2 Cheesecake Factory Inc. (NASDAQ: CAKE)
Sector: Consumer Cyclical • Restaurants
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 CAKE is if the stock breaks out of the uptrend channel and has a daily close above $84.30. This is marked in the chart below as a green color dotted line.
Daily chart – CAKE
CAKE – Uptrend Channel
#3 Phathom Pharmaceuticals Inc. (NASDAQ: PHAT)
Sector: Healthcare • Biotechnology
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 PHAT is above the nearest resistance level of $13.00. This is marked in the chart below as a green color dotted line.
Daily chart – PHAT
PHAT – Falling Wedge Pattern Breakout
#4 Regions Financial Corp. (NYSE: RF)
Sector: Financial • Banks – Regional
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 RF is if the stock closes above the immediate resistance level of $31.50. This is marked in the chart below as a green color dotted line.
Daily chart – RF
RF – Symmetrical Triangle Pattern Breakout
#5 Banco Santander (Brasil) SA ADR (NYSE: BSBR)
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 BSBR is if the stock breaks out of the falling wedge pattern, at a price of around $5.70. This is marked in the chart below as a green color dotted line.
Daily chart – BSBR
BSBR – Falling Wedge Pattern
#6 Cisco Systems Inc. (NASDAQ: CSCO)
Sector: Technology • Communication Equipment
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 CSCO is above the near-term resistance level of $122.70. This is marked in the chart below as a green color dotted line.
Daily chart – CSCO
CSCO – Flag Pattern Breakout
#7 Ovintiv Inc. (NYSE: OVV)
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 OVV is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $57.50. This is marked in the chart below as a green color dotted line.
Daily chart – OVV
OVV – Symmetrical Triangle Pattern
#8 Nu Holdings Ltd. (NYSE: NU)
Sector: Financial • Banks – Regional
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 NU is if the stock breaks out of the downtrend channel and has a daily close above $14.40. This is marked in the chart below as a green color dotted line.
Daily chart – NU
NU – Downtrend Channel
#9 Forte Biosciences Inc. (NASDAQ: FBRX)
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 FBRX is if the stock closes above the immediate resistance level of $45.50. This is marked in the chart below as a green color dotted line.
Daily chart – FBRX
FBRX – Symmetrical Triangle Pattern Breakout
#10 Build A Bear Workshop Inc. (NYSE: BBW)
Sector: Consumer Cyclical • Specialty Retail
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 BBW is above the nearest resistance level of $36.10. This is marked in the chart below as a green color dotted line.
Daily chart – BBW
BBW – Falling Wedge Pattern Breakout
Ten names, two temperaments. Half the list — Albertsons, Phathom, Banco Santander Brasil, Build-A-Bear, and Nu Holdings — is built on reversal-flavored setups: falling wedges and a downtrend-channel break, the kind of pattern that only appears after a stock has been beaten down and is trying to turn. The other half — Cisco, Cheesecake Factory, Regions, Ovintiv, and Forte — is continuation and consolidation, names working from a position of relative strength.
The reversal side carries the higher reward if it resolves and the higher risk if it doesn’t. That’s exactly why the rule doesn’t change: a clean daily close above the buy level listed alongside each ticker. Not the intraday tap. Not the open. The close. On a turnaround setup, that close is the line between a bottom and a bull trap.
We’ll watch the table this week and let the names sort themselves out.
Happy Trading!
Tara and Greg
