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 | TriNet Group, Inc. | NYSE: TNET | $106.85 | $108.40 | Symmetrical Triangle Pattern Breakout |
| 2 | Petroleo Brasileiro S.A. – Petrobras | NYSE: PBR | $13.76 | $13.90 | Breakout From Consolidation Area |
| 3 | PDD Holdings Inc. | NASDAQ: PDD | $76.10 | $77.70 | Symmetrical Triangle Pattern Breakout |
| 4 | Match Group, Inc. | NASDAQ: MTCH | $41.59 | $42.50 | Falling Wedge Pattern Breakout |
| 5 | AGNC Investment Corp. | NASDAQ: AGNC | $9.79 | $10.10 | Symmetrical Triangle Pattern Breakout |
| 6 | Xometry, Inc. | NASDAQ: XMTR | $21.65 | $23.30 | Downtrend Channel Breakout |
| 7 | Biora Therapeutics, Inc. | NASDAQ: BIOR | $5.98 | $6.10 | Symmetrical Triangle Pattern Breakout |
| 8 | QUALCOMM Incorporated | NASDAQ: QCOM | $119.11 | $120.20 | Falling Wedge Pattern Breakout |
| 9 | Beyond Meat, Inc. | NASDAQ: BYND | $12.06 | $13.00 | Symmetrical Triangle Pattern Breakout |
| 10 | NIO Inc. | NYSE: NIO | $7.73 | $8.25 | Falling Wedge 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 TriNet Group, Inc. (NYSE: TNET)
Sector: Industrials | Staffing & Employment 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 TNET is if the stock closes above the immediate resistance level of $108.40. This is marked in the chart below as a green color dotted line.
Daily chart – TNET
TNET – Symmetrical Triangle Pattern Breakout
#2 Petroleo Brasileiro S.A. – Petrobras (NYSE: PBR)
Sector: Energy | Oil & Gas Integrated
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 PBR is above the near-term resistance area, which translates to a price of around $13.90. This is marked in the chart below as a green color dotted line.
Daily chart – PBR
PBR – Breakout From Consolidation Area
#3 PDD Holdings Inc. (NASDAQ: PDD)
Sector: Consumer Cyclical | Internet Retail
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 PDD is if the stock closes above the immediate resistance level of $77.70. This is marked in the chart below as a green color dotted line.
Daily chart – PDD
PDD – Symmetrical Triangle Pattern Breakout
#4 Match Group, Inc. (NASDAQ: MTCH)
Sector: Communication Services | Internet Content & Information
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 MTCH is above the nearest resistance level of $42.50. This is marked in the chart below as a green color dotted line.
Daily chart – MTCH
MTCH – Falling Wedge Pattern Breakout
#5 AGNC Investment Corp. (NASDAQ: AGNC)
Sector: Real Estate | REIT – Mortgage
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 AGNC is if the stock closes above the immediate resistance level of $10.10. This is marked in the chart below as a green color dotted line.
Daily chart – AGNC
AGNC – Symmetrical Triangle Pattern Breakout
#6 Xometry, Inc. (NASDAQ: XMTR)
Sector: Industrials | Specialty Industrial Machinery
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 XMTR is if the stock has a daily close above $23.30. This is marked in the chart below as a green color dotted line.
Daily chart – XMTR
XMTR – Downtrend Channel Breakout
#7 Biora Therapeutics, Inc. (NASDAQ: BIOR)
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 BIOR is if the stock closes above the immediate resistance level of $6.10. This is marked in the chart below as a green color dotted line.
Daily chart – BIOR
BIOR – Symmetrical Triangle Pattern Breakout
#8 QUALCOMM Incorporated (NASDAQ: QCOM)
Sector: Technology | Semiconductors
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 QCOM is above the nearest resistance level of $120.20. This is marked in the chart below as a green color dotted line.
Daily chart – QCOM
QCOM – Falling Wedge Pattern Breakout
#9 Beyond Meat, Inc. (NASDAQ: BYND)
Sector: Consumer Defensive | Packaged Foods
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 BYND 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 – BYND
BYND – Symmetrical Triangle Pattern Breakout
#10 NIO Inc. (NYSE: NIO)
Sector: Consumer Cyclical | Auto Manufacturers
Reason: Formation of a Falling Wedge Pattern
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 ideal buy level for NIO is if the stock breaks out of the falling wedge pattern, at a price of around $8.25. This is marked in the chart below as a green color dotted line.
Daily chart – NIO
NIO – Falling Wedge Pattern
Happy Trading!
Trades of The Day Research Team
Source: Trades of the Day