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 | Carnival Corp | NYSE: CCL | $26.80 | $27.30 | Uptrend Channel |
| 2 | Doximity Inc. | NYSE: DOCS | $57.83 | $58.10 | Symmetrical Triangle Pattern |
| 3 | Accenture plc | NYSE: ACN | $366.37 | $372.00 | Flag Pattern |
| 4 | Red Cat Holdings Inc. | NASDAQ: RCAT | $10.75 | $11.00 | Symmetrical Triangle Pattern Breakout |
| 5 | Johnson Controls International plc | NYSE: JCI | $80.64 | $84.60 | Uptrend Channel |
| 6 | Gilead Sciences, Inc. | NASDAQ: GILD | $92.57 | $93.30 | Symmetrical Triangle Pattern |
| 7 | Funko Inc. | NASDAQ: FNKO | $12.49 | $13.00 | Ascending Triangle Pattern |
| 8 | Gamestop Corporation | NYSE: GME | $29.82 | $31.50 | Symmetrical Triangle Pattern |
| 9 | Crocs Inc. | NASDAQ: CROX | $111.86 | $114.80 | Falling Wedge Pattern |
| 10 | Microstrategy Inc. | NASDAQ: MSTR | $364.20 | $374.20 | Symmetrical Triangle Pattern |
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 Carnival Corp (NYSE: CCL)
Sector: Consumer Cyclical • Travel Services
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 CCL is if the stock breaks out of the uptrend channel and has a daily close above $27.30. This is marked in the chart below as a green color dotted line.
Daily chart – CCL
CCL – Uptrend Channel
#2 Doximity Inc. (NYSE: DOCS)
Sector: Healthcare • Health Information Services
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 DOCS is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $58.10. This is marked in the chart below as a green color dotted line.
Daily chart – DOCS
DOCS – Symmetrical Triangle Pattern
#3 Accenture plc (NYSE: ACN)
Sector: Technology • Information Technology 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 ACN is if the stock breaks out of the flag pattern, at around $372.00 This is marked in the chart below as a green color dotted line.
Daily chart – ACN
ACN – Flag Pattern
#4 Red Cat Holdings Inc. (NASDAQ: RCAT)
Sector: Technology • Computer Hardware
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 RCAT is if the stock closes above the immediate resistance level of $11.00. This is marked in the chart below as a green color dotted line.
Daily chart – RCAT
RCAT – Symmetrical Triangle Pattern Breakout
#5 Johnson Controls International plc (NYSE: JCI)
Sector: Industrials • Building Products & 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 JCI is if the stock breaks out of the uptrend channel and has a daily close above $84.60. This is marked in the chart below as a green color dotted line.
Daily chart – JCI
JCI – Uptrend Channel
#6 Gilead Sciences, Inc. (NASDAQ: GILD)
Sector: Healthcare • Drug Manufacturers – General
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 GILD is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $93.30. This is marked in the chart below as a green color dotted line.
Daily chart – GILD
GILD – Symmetrical Triangle Pattern
#7 Funko Inc. (NASDAQ: FNKO)
Sector: Consumer Cyclical • Leisure
Reason: Formation of 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): The ideal buy level for FNKO is if the stock breaks out of the ascending triangle pattern and has a daily close above the near-term resistance level of $13.00. This is marked in the chart below as a green color dotted line.
Daily chart – FNKO
FNKO – Ascending Triangle Pattern
#8 Gamestop Corporation (NYSE: GME)
Sector: Consumer Cyclical • Specialty Retail
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 GME is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $31.50. This is marked in the chart below as a green color dotted line.
Daily chart – GME
GME – Symmetrical Triangle Pattern
#9 Crocs Inc. (NASDAQ: CROX)
Sector: Consumer Cyclical • Footwear & Accessories
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 CROX is if the stock breaks out of the falling wedge pattern, at a price of around $114.80. This is marked in the chart below as a green color dotted line.
Daily chart – CROX
CROX – Falling Wedge Pattern
#10 Microstrategy Inc. (NASDAQ: MSTR)
Sector: Technology • Software – Application
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 MSTR is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $374.20. This is marked in the chart below as a green color dotted line.
Daily chart – MSTR
MSTR – Symmetrical Triangle Pattern
Happy Trading!
Trades of The Day Research Team
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