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 | The Clorox Company | NYSE: CLX | $154.77 | $155.50 | Symmetrical Triangle Pattern Breakout |
| 2 | Palantir Technologies Inc. | NYSE: PLTR | $8.41 | $9.10 | Falling Wedge Pattern Breakout |
| 3 | Old National Bancorp | NASDAQ: ONB | $17.92 | $18.60 | Flag Pattern |
| 4 | 2U, Inc. | NASDAQ: TWOU | $12.81 | $13.00 | Symmetrical Triangle Pattern Breakout |
| 5 | Ford Motor Company | NYSE: F | $13.23 | $14.30 | Falling Wedge Pattern Breakout |
| 6 | General Motors Company | NYSE: GM | $41.13 | $41.50 | Ascending Triangle Pattern |
| 7 | Beam Therapeutics Inc. | NASDAQ: BEAM | $48.45 | $51.90 | Symmetrical Triangle Pattern Breakout |
| 8 | BigBear.ai Holdings, Inc. | NYSE: BBAI | $5.19 | $5.65 | Falling Wedge Pattern Breakout |
| 9 | 8×8, Inc. | NASDAQ: EGHT | $6.33 | $6.80 | Symmetrical Triangle Pattern Breakout |
| 10 | Upstart Holdings, Inc. | NASDAQ: UPST | $22.10 | $25.30 | 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 The Clorox Company (NYSE: CLX)
Sector: Consumer Defensive | Household & Personal Products
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 CLX is if the stock closes above the immediate resistance level of $155.50. This is marked in the chart below as a green color dotted line.
Daily chart – CLX
CLX – Symmetrical Triangle Pattern Breakout
#2 Palantir Technologies Inc. (NYSE: PLTR)
Sector: Technology | Software – Infrastructure
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 PLTR is above the nearest resistance level of $9.10. This is marked in the chart below as a green color dotted line.
Daily chart – PLTR
PLTR – Falling Wedge Pattern Breakout
#3 Old National Bancorp (NASDAQ: ONB)
Sector: Financial | Banks – Regional
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 ONB is if the stock breaks out of the flag pattern, at around $18.60. This is marked in the chart below as a green color dotted line.
Daily chart – ONB
ONB – Flag Pattern
#4 2U, Inc. (NASDAQ: TWOU)
Sector: Consumer Defensive | Education & Training Services
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 TWOU is if the stock closes above the immediate resistance level of $13.00. This is marked in the chart below as a green color dotted line.
Daily chart – TWOU
TWOU – Symmetrical Triangle Pattern Breakout
#5 Ford Motor Company (NYSE: F)
Sector: Consumer Cyclical | Auto Manufacturers
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 F is above the nearest resistance level of $14.30. This is marked in the chart below as a green color dotted line.
Daily chart – F
F – Falling Wedge Pattern Breakout
#6 General Motors Company (NYSE: GM)
Sector: Consumer Cyclical | Auto Manufacturers
Reason: Formation of 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): The ideal buy level for GM is if the stock breaks out of the ascending triangle pattern and has a daily close above the near-term resistance level of $41.50. This is marked in the chart below as a green color dotted line.
Daily chart – GM
GM – Ascending Triangle Pattern
#7 Beam Therapeutics Inc. (NASDAQ: BEAM)
Sector: Healthcare | Biotechnology
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 BEAM is if the stock closes above the immediate resistance level of $51.90. This is marked in the chart below as a green color dotted line.
Daily chart – BEAM
BEAM – Symmetrical Triangle Pattern Breakout
#8 BigBear.ai Holdings, Inc. (NYSE: BBAI)
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 BBAI is above the nearest resistance level of $5.65. This is marked in the chart below as a green color dotted line.
Daily chart – BBAI
BBAI – Falling Wedge Pattern Breakout
#9 8×8, Inc. (NASDAQ: EGHT)
Sector: Technology | Software – Application
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 EGHT is if the stock closes above the immediate resistance level of $6.80. This is marked in the chart below as a green color dotted line.
Daily chart – EGHT
EGHT – Symmetrical Triangle Pattern Breakout
#10 Upstart Holdings, Inc. (NASDAQ: UPST)
Sector: Financial | Credit 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 UPST is above the nearest resistance level of $25.30. This is marked in the chart below as a green color dotted line.
Daily chart – UPST
UPST – Falling Wedge Pattern Breakout
Happy Trading!
Trades of The Day Research Team
Source: Trades of the Day