The Top 10 Stocks to Watch This Week for Possible Breakouts

All 10 names on this week’s watchlist have already broken out of their primary chart pattern.

Every. Single. One.

That’s not how this list usually looks. Most weeks the table is mixed — some names already moving, others still coiling inside their patterns waiting on the first trigger to fire. This week is different. The first trigger has fired across the board.

What that changes is the kind of trade in front of us. These aren’t anticipation setups. They’re confirmation setups. The pattern is already through, and the question now is whether buyers show up to defend the breakout with a clean daily close above the resistance level listed alongside each ticker. That’s the line that turns a fresh breakout into the start of a real move — and that’s the line we’re watching this week.

Closes, not taps. Confirmation, not anticipation.

Here are the 10 stocks we’re watching this week, in no particular order.

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 AvePoint Inc. (NASDAQ: AVPT)

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 AVPT is if the stock has a daily close above $11.80. This is marked in the chart below as a green color dotted line.

Daily chart – AVPT

#2 Datadog Inc. (NASDAQ: DDOG)

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 DDOG is above the nearest resistance level of $202.00. This is marked in the chart below as a green color dotted line.

Daily chart – DDOG

#3 Dell Technologies Inc. (NYSE: DELL)

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 DELL is if the stock has a daily close above the near-term resistance level of $264.00. This is marked in the chart below as a green color dotted line.

Daily chart – DELL

#4 Innodata Inc. (NASDAQ: INOD)

Sector: Technology • Information Technology Services

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 INOD is above the nearest resistance level of $87.70. This is marked in the chart below as a green color dotted line.

Daily chart – INOD

 

#5 Insight Enterprises Inc. (NASDAQ: NSIT)

Sector: Technology • Electronics & Computer Distribution

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 NSIT is if the stock has a daily close above $86.50. This is marked in the chart below as a green color dotted line.

Daily chart – NSIT

#6 Joby Aviation Inc. (NYSE: JOBY)

Sector: Industrials • Airports & Air Services

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 JOBY is above the nearest resistance level of $11.40. This is marked in the chart below as a green color dotted line.

Daily chart – JOBY

#7 Apple Inc. (NASDAQ: AAPL)

Sector: Technology • Consumer Electronics

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 AAPL is above the near-term resistance level of $295.20. This is marked in the chart below as a green color dotted line.

Daily chart – AAPL

#8 Wendy’s Co. (NASDAQ: WEN)

Sector: Consumer Cyclical • Restaurants

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 WEN is above the nearest resistance level of $7.45. This is marked in the chart below as a green color dotted line.

Daily chart – WEN

#9 WillScot Holdings Corp. (NASDAQ: WSC)

Sector: Industrials • Rental & Leasing Services

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 WSC is above the near-term resistance area, which translates to a price of around $28.50. This is marked in the chart below as a green color dotted line.

Daily chart – WSC

#10 Eos Energy Enterprises Inc. (NASDAQ: EOSE)

Sector: Industrials • Electrical Equipment & Parts

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 EOSE is above the nearest resistance level of $8.50. This is marked in the chart below as a green color dotted line.

Daily chart – EOSE

Happy Trading!
Tara and Greg