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 | Wynn Resorts Ltd | NASDAQ: WYNN | $126.14 | $129.40 | Flag Pattern |
| 2 | NVIDIA Corp. | NASDAQ: NVDA | $188.15 | $194.00 | Uptrend Channel |
| 3 | Chime Financial Inc. | NASDAQ: CHYM | $20.34 | $20.60 | Falling Wedge Pattern Breakout |
| 4 | IonQ Inc. | NYSE: IONQ | $59.27 | $63.80 | Flag Pattern |
| 5 | Sandisk Corp. | NASDAQ: SNDK | $239.48 | $241.40 | Uptrend Channel Breakout |
| 6 | Coca-Cola Co. | NYSE: KO | $70.55 | $70.80 | Symmetrical Triangle Pattern |
| 7 | SoundHound AI Inc. | NASDAQ: SOUN | $14.14 | $15.80 | Flag Pattern |
| 8 | OneStream Inc. | NASDAQ: OS | $22.74 | $23.20 | Downtrend Channel Breakout |
| 9 | Delek US Holdings Inc. | NYSE: DK | $41.43 | $41.80 | Uptrend Channel |
| 10 | Starbucks Corp. | NASDAQ: SBUX | $85.57 | $87.20 | 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 Wynn Resorts Ltd (NASDAQ: WYNN)
Sector: Consumer Cyclical • Resorts & Casinos
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 WYNN is if the stock breaks out of the flag pattern, at around $129.40. This is marked in the chart below as a green color dotted line.
Daily chart – WYNN
WYNN – Flag Pattern
#2 NVIDIA Corp. (NASDAQ: NVDA)
Sector: Technology • Semiconductors
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 NVDA is if the stock has a daily close above $194.00. This is marked in the chart below as a green color dotted line.
Daily chart – NVDA
NVDA – Uptrend Channel
#3 Chime Financial Inc. (NASDAQ: CHYM)
Sector: Technology • Software – Application
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 CHYM is above the nearest resistance level of $20.60. This is marked in the chart below as a green color dotted line.
Daily chart – CHYM
CHYM – Falling Wedge Pattern Breakout
#4 IonQ Inc. (NYSE: IONQ)
Sector: Technology • Computer Hardware
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 IONQ is if the stock breaks out of the flag pattern, at around $63.80. This is marked in the chart below as a green color dotted line.
Daily chart – IONQ
IONQ – Flag Pattern
#5 Sandisk Corp. (NASDAQ: SNDK)
Sector: Technology • Computer Hardware
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 SNDK is if the stock has a daily close above the near-term resistance level of $241.40. This is marked in the chart below as a green color dotted line.
Daily chart – SNDK
SNDK – Uptrend Channel Breakout
#6 Coca-Cola Co. (NYSE: KO)
Sector: Consumer Defensive • Beverages – Non-Alcoholic
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 KO is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $70.80. This is marked in the chart below as a green color dotted line.
Daily chart – KO
KO – Symmetrical Triangle Pattern
#7 SoundHound AI Inc. (NASDAQ: SOUN)
Sector: Technology • Software – Application
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 SOUN is if the stock breaks out of the flag pattern, at around $15.80. This is marked in the chart below as a green color dotted line.
Daily chart – SOUN
SOUN – Flag Pattern
#8 OneStream Inc. (NASDAQ: OS)
Sector: Technology • Software – Infrastructure
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 OS is if the stock has a daily close above $23.20. This is marked in the chart below as a green color dotted line.
Daily chart – OS
OS – Downtrend Channel Breakout
#9 Delek US Holdings Inc. (NYSE: DK)
Sector: Energy • Oil & Gas Refining & Marketing
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 DK is if the stock breaks out of the uptrend channel and has a daily close above $41.80. This is marked in the chart below as a green color dotted line.
Daily chart – DK
DK – Uptrend Channel
#10 Starbucks Corp. (NASDAQ: SBUX)
Sector: Consumer Cyclical • Restaurants
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 SBUX is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $87.20. This is marked in the chart below as a green color dotted line.
Daily chart – SBUX
SBUX – Symmetrical Triangle Pattern
Happy Trading!
Trades of The Day Research Team
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