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 | uniQure N.V | NASDAQ: QURE | $13.00 | $13.20 | Downtrend Channel |
| 2 | Netflix Inc. | NASDAQ: NFLX | $973.03 | $980.50 | Flag Pattern Breakout |
| 3 | MarketAxess Holdings Inc. | NASDAQ: MKTX | $225.16 | $226.50 | Downtrend Channel Breakout |
| 4 | Realty Income Corp. | NYSE: O | $58.32 | $58.80 | Symmetrical Triangle Pattern Breakout |
| 5 | W.W. Grainger Inc. | NYSE: GWW | $1,002.69 | $1,008.00 | Downtrend Channel |
| 6 | Dollar General Corp. | NYSE: DG | $93.07 | $95.10 | Symmetrical Triangle Pattern |
| 7 | Structure Therapeutics Inc ADR | NASDAQ: GPCR | $21.76 | $22.80 | Downtrend Channel |
| 8 | Trump Media & Technology Group Corp. | NASDAQ: DJT | $22.04 | $23.10 | Symmetrical Triangle Pattern Breakout |
| 9 | Magnite Inc. | NASDAQ: MGNI | $11.13 | $11.40 | Falling Wedge Pattern Breakout |
| 10 | YPF ADR | NYSE: YPF | $33.08 | $35.10 | Downtrend Channel |
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 uniQure N.V (NASDAQ: QURE)
Sector: Healthcare • Biotechnology
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 QURE is if the stock breaks out of the downtrend channel and has a daily close above $13.20. This is marked in the chart below as a green color dotted line.
Daily chart – QURE
QURE – Downtrend Channel
#2 Netflix Inc. (NASDAQ: NFLX)
Sector: Communication Services • Entertainment
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 NFLX is above the near-term resistance level of $980.50. This is marked in the chart below as a green color dotted line.
Daily chart – NFLX
NFLX – Flag Pattern Breakout
#3 MarketAxess Holdings Inc. (NASDAQ: MKTX)
Sector: Financial • Capital Markets
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 MKTX is if the stock has a daily close above $226.50. This is marked in the chart below as a green color dotted line.
Daily chart – MKTX
MKTX – Downtrend Channel Breakout
#4 Realty Income Corp. (NYSE: O)
Sector: Real Estate • REIT – Retail
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 O is if the stock closes above the immediate resistance level of $58.80. This is marked in the chart below as a green color dotted line.
Daily chart – O
O – Symmetrical Triangle Pattern Breakout
#5 W.W. Grainger Inc. (NYSE: GWW)
Sector: Industrials • Industrial Distribution
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 GWW is if the stock breaks out of the downtrend channel and has a daily close above $1,008.00. This is marked in the chart below as a green color dotted line.
Daily chart – GWW
GWW – Downtrend Channel
#6 Dollar General Corp. (NYSE: DG)
Sector: Consumer Defensive • Discount Stores
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 DG is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $95.10. This is marked in the chart below as a green color dotted line.
Daily chart – DG
DG – Symmetrical Triangle Pattern
#7 Structure Therapeutics Inc ADR (NASDAQ: GPCR)
Sector: Healthcare • Biotechnology
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 GPCR is if the stock breaks out of the downtrend channel and has a daily close above $22.80. This is marked in the chart below as a green color dotted line.
Daily chart – GPCR
GPCR – Downtrend Channel
#8 Trump Media & Technology Group Corp (NASDAQ: DJT)
Sector: Communication Services • Internet Content & Information
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 DJT is if the stock closes above the immediate resistance level of $23.10. This is marked in the chart below as a green color dotted line.
Daily chart – DJT
DJT – Symmetrical Triangle Pattern Breakout
#9 Magnite Inc. (NASDAQ: MGNI)
Sector: Communication Services • Advertising Agencies
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 MGNI is above the nearest resistance level of $11.40. This is marked in the chart below as a green color dotted line.
Daily chart – MGNI
MGNI – Falling Wedge Pattern Breakout
#10 YPF ADR (NYSE: YPF)
Sector: Energy • Oil & Gas Integrated
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 YPF is if the stock breaks out of the downtrend channel and has a daily close above $35.10. This is marked in the chart below as a green color dotted line.
Daily chart – YPF
YPF – Downtrend Channel
Happy Trading!
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