The Top 10 Stocks to Watch This Week for Possible Breakouts

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	Emerson Electric Co.	NYSE: EMR	$86.36	$87.40	Symmetrical Triangle Pattern
2	Teck Resources Limited	NYSE: TECK	$45.22	$46.00	Ascending Triangle Pattern
3	Horizon Therapeutics Public Limited Company	NASDAQ: HZNP	$111.60	$113.40	Symmetrical Triangle Pattern Breakout
4	JPMorgan Chase & Co.	NYSE: JPM	$138.73	$140.00	Flag Pattern Breakout
5	Dell Technologies Inc.	NYSE: DELL	$43.28	$43.50	Symmetrical Triangle Pattern Breakout
6	Life Storage, Inc.	NYSE: LSI	$137.00	$135.00	Downtrend Channel Breakout
7	Merus N.V.	NASDAQ: MRUS	$21.75	$22.30	Symmetrical Triangle Pattern Breakout
8	WW International, Inc.	NASDAQ: WW	$7.56	$7.80	Symmetrical Triangle Pattern Breakout
9	Bio-Techne Corporation	NASDAQ: TECH	$85.24	$87.10	Symmetrical Triangle Pattern Breakout
10	Rapid7, Inc.	NASDAQ: RPD	$46.96	$48.30	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 Emerson Electric Co. (NYSE: EMR)

Sector: Industrials | Specialty Industrial Machinery

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 EMR is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $87.40. This is marked in the chart below as a green color dotted line.

Daily chart – EMR

 

#2 Teck Resources Limited (NYSE: TECK)

Sector: Basic Materials | Other Industrial Metals & Mining

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 TECK is if the stock breaks out of the ascending triangle pattern and has a daily close above the near-term resistance level of $46.00. This is marked in the chart below as a green color dotted line.

Daily chart – TECK

#3 Horizon Therapeutics Public Limited Company (NASDAQ: HZNP)

Sector: Healthcare | Drug Manufacturers – General

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 HZNP is if the stock closes above the immediate resistance level of $113.40. This is marked in the chart below as a green color dotted line.

Daily chart – HZNP

#4 JPMorgan Chase & Co. (NYSE: JPM)

Sector: Financial | Banks – Diversified

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 JPM is above the near-term resistance level of $140.00. This is marked in the chart below as a green color dotted line.

Daily chart – JPM

#5 Dell Technologies Inc. (NYSE: DELL)

Sector: Technology | Computer Hardware

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 DELL is if the stock closes above the immediate resistance level of $43.50. This is marked in the chart below as a green color dotted line.

Daily chart – DELL

#6 Life Storage, Inc. (NYSE: LSI)

Sector: Real Estate | REIT – Industrial

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 LSI is if the stock has a daily close above $135.00. This is marked in the chart below as a green color dotted line.

Daily chart – LSI

#7 Merus N.V. (NASDAQ: MRUS)

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 MRUS is if the stock closes above the immediate resistance level of $22.30. This is marked in the chart below as a green color dotted line.

Daily chart – MRUS

#8 WW International, Inc. (NASDAQ: WW)

Sector: Consumer Cyclical | Personal 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 WW is if the stock closes above the immediate resistance level of $7.80. This is marked in the chart below as a green color dotted line.

Daily chart – WW

#9 Bio-Techne Corporation (NASDAQ: TECH)

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 TECH is if the stock closes above the immediate resistance level of $87.10. This is marked in the chart below as a green color dotted line.

Daily chart – TECH

#10 Rapid7, Inc. (NASDAQ: RPD)

Sector: Technology | Software – Infrastructure

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 RPD is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $48.30. This is marked in the chart below as a green color dotted line.

Daily chart – RPD

Happy Trading!

Trades of The Day Research Team

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Source: Trades of the Day