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 | Greenidge Generation Holdings Inc. | NASDAQ: GREE | $11.52 | $13.50 | Falling Wedge Pattern Breakout |
| 2 | Inogen, Inc. | NASDAQ: INGN | $35.28 | $36.50 | Consolidation Area |
| 3 | MongoDB, Inc. | NASDAQ: MDB | $454.45 | $459.80 | Downtrend Channel Breakout |
| 4 | Insignia Systems, Inc. | NASDAQ: ISIG | $12.69 | $14.40 | Falling Wedge Pattern Breakout |
| 5 | System1, Inc. | NYSE: SST | $15.42 | $16.00 | Flag Pattern Breakout |
| 6 | Tellurian Inc. | AMEX: TELL | $6.34 | $6.50 | Symmetrical Triangle Pattern Breakout |
| 7 | Snowflake Inc. | NYSE: SNOW | $234.81 | $239.00 | Downtrend Channel |
| 8 | Monster Beverage Corporation | NASDAQ: MNST | $82.15 | $83.00 | Falling Wedge Pattern Breakout |
| 9 | Vistra Corp. | NYSE: VST | $23.44 | $23.60 | Ascending Triangle Pattern Breakout |
| 10 | Vy Global Growth | NYSE: VYGG | $10.00 | $10.00 | Symmetrical Triangle 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 Greenidge Generation Holdings Inc. (NASDAQ: GREE)
Sector: Financial | Capital Markets
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 GREE is above the nearest resistance level of $13.50. This is marked in the chart below as a green color dotted line.
Daily chart – GREE
GREE – Falling Wedge Pattern Breakout
#2 Inogen, Inc. (NASDAQ: INGN)
Sector: Healthcare | Medical Devices
Reason: Formation of 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): The ideal buy level for INGN is above the breakout level of the consolidation area, at around $36.50. This is marked in the chart below as a green color dotted line.
Daily chart – INGN
INGN – Consolidation Area
#3 MongoDB, Inc. (NASDAQ: MDB)
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): Although the stock has currently broken out of the downtrend channel, the ideal buy level for MDB is above the near-term resistance area, which translates to a price of around $459.80. This is marked in the chart below as a green color dotted line.
Daily chart – MDB
MDB – Downtrend Channel Breakout
#4 Insignia Systems, Inc. (NASDAQ: ISIG)
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 ISIG is above the nearest resistance level of $14.40. This is marked in the chart below as a green color dotted line.
Daily chart – ISIG
ISIG – Falling Wedge Pattern Breakout
#5 System1, Inc. (NYSE: SST)
Sector: Industrials | Specialty Business Services
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 SST is above the near-term resistance level of $16.00. This is marked in the chart below as a green color dotted line.
Daily chart – SST
SST – Flag Pattern Breakout
#6 Tellurian Inc. (AMEX: TELL)
Sector: Energy | Oil & Gas E&P
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 an 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 TELL is if the stock closes above the immediate resistance level of $6.50. This is marked in the chart below as a green color dotted line.
Daily chart – TELL
TELL – Symmetrical Triangle Pattern Breakout
#7 Snowflake Inc. (NYSE: SNOW)
Sector: Technology | Software – Application
Reason: Downtrend Channel Pattern
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 ideal buy level for SNOW is if the stock breaks out of the downtrend channel and closes above the price of $239.00. This is marked in the chart below as a green color dotted line.
Daily chart – SNOW
SNOW – Downtrend Channel
#8 Monster Beverage Corporation (NASDAQ: MNST)
Sector: Consumer Defensive | Beverages – Non-Alcoholic
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 MNST is above the nearest resistance level of $83.00. This is marked in the chart below as a green color dotted line.
Daily chart – MNST
MNST – Falling Wedge Pattern Breakout
#9 Vistra Corp. (NYSE: VST)
Sector: Utilities | Utilities – Independent Power Producers
Reason: Breakout From 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): Although the stock has broken out of the ascending triangle pattern, the ideal buy level for VST is if the stock has a daily close above the near-term resistance level of $23.60. This is marked in the chart below as a green color dotted line.
Daily chart – VST
VST – Ascending Triangle Pattern Breakout
#10 Vy Global Growth (NYSE: VYGG)
Sector: Financial | Shell Companies
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 an 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 VYGG is if the stock closes above the immediate resistance level of $10.00. This is marked in the chart below as a green color dotted line.
Daily chart – VYGG
VYGG – Symmetrical Triangle Pattern Breakout
Happy Trading!
Trades of The Day Research Team
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Source: Trades of the Day