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 | SoundHound AI Inc. | NASDAQ: SOUN | $11.75 | $12.70 | Falling Wedge Pattern Breakout |
| 2 | Lam Research Corp | NASDAQ: LRCX | $218.36 | $220.10 | Uptrend Channel Breakout |
| 3 | Oklo Inc. | NYSE: OKLO | $105.31 | $112.50 | Falling Wedge Pattern Breakout |
| 4 | Critical Metals Corp. | NASDAQ: CRML | $14.98 | $15.50 | Symmetrical Triangle Pattern Breakout |
| 5 | UWM Holdings Corporation | NYSE: UWMC | $5.36 | $5.50 | Downtrend Channel |
| 6 | Cg Oncology Inc. | NASDAQ: CGON | $54.20 | $55.10 | Breakout From Consolidation Area |
| 7 | ASP Isotopes Inc. | NASDAQ: ASPI | $7.51 | $7.70 | Falling Wedge Pattern Breakout |
| 8 | Uranium Energy Corp. | AMEX: UEC | $14.76 | $15.10 | Flag Pattern Breakout |
| 9 | Nike, Inc. | NYSE: NKE | $65.92 | $66.10 | Downtrend Channel |
| 10 | Terrestrial Energy Inc. | NASDAQ: IMSR | $9.37 | $9.70 | Falling Wedge Pattern 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 SoundHound AI Inc. (NASDAQ: SOUN)
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 SOUN is above the nearest resistance level of $12.70. This is marked in the chart below as a green color dotted line.
Daily chart – SOUN
SOUN – Falling Wedge Pattern Breakout
#2 Lam Research Corp (NASDAQ: LRCX)
Sector: Technology • Semiconductor Equipment & Materials
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 LRCX is if the stock has a daily close above the near-term resistance level of $220.10. This is marked in the chart below as a green color dotted line.
Daily chart – LRCX
LRCX – Uptrend Channel Breakout
#3 Oklo Inc. (NYSE: OKLO)
Sector: Utilities • Utilities – Independent Power Producers
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 OKLO is above the nearest resistance level of $112.50. This is marked in the chart below as a green color dotted line.
Daily chart – OKLO
OKLO – Falling Wedge Pattern Breakout
#4 Critical Metals Corp. (NASDAQ: CRML)
Sector: Basic Materials • Other Industrial Metals & Mining
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 CRML is if the stock closes above the immediate resistance level of $15.50. This is marked in the chart below as a green color dotted line.
Daily chart – CRML
CRML – Symmetrical Triangle Pattern Breakout
#5 UWM Holdings Corporation (NYSE: UWMC)
Sector: Financial • Mortgage Finance
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 UWMC is if the stock breaks out of the downtrend channel and has a daily close above $5.50. This is marked in the chart below as a green color dotted line.
Daily chart – UWMC
UWMC – Downtrend Channel
#6 Cg Oncology Inc. (NASDAQ: CGON)
Sector: Healthcare • Biotechnology
Reason: Breakout From a Consolidation Area in the Daily Chart
A Consolidation Area is a price action contained between two parallel lines. It is formed by a lower line that connects the lows, and an upper line that joins the highs. A stock usually trades between the two lines of the consolidation area before finally breaking out from the upper rail.
Buy Level(s): Although the stock has currently broken out of a consolidation area, the ideal buy level for CGON is above the near-term resistance area, which translates to a price of around $55.10. This is marked in the chart below as a green color dotted line.
Daily chart – CGON
CGON – Breakout From Consolidation Area
#7 ASP Isotopes Inc. (NASDAQ: ASPI)
Sector: Basic Materials • Chemicals
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 API is above the nearest resistance level of $7.70. This is marked in the chart below as a green color dotted line.
Daily chart – ASPI
ASPI – Falling Wedge Pattern Breakout
#8 Uranium Energy Corp. (AMEX: UEC)
Sector: Energy • Uranium
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 UEC is above the near-term resistance level of $15.10. This is marked in the chart below as a green color dotted line.
Daily chart – UEC
UEC – Flag Pattern Breakout
#9 Nike, Inc. (NYSE: NKE)
Sector: Consumer Cyclical • Footwear & Accessories
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 NKE is if the stock breaks out of the downtrend channel and has a daily close above $66.10. This is marked in the chart below as a green color dotted line.
Daily chart – NKE
NKE – Downtrend Channel
#10 Terrestrial Energy Inc. (NASDAQ: IMSR)
Sector: Utilities • Utilities – Regulated Electric
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 IMSR is above the nearest resistance level of $9.70. This is marked in the chart below as a green color dotted line.
Daily chart – IMSR
IMSR – Falling Wedge Pattern Breakout
Happy Trading!
Trades of The Day Research Team
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