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 Starbucks Corporation NASDAQ: SBUX $102.82 $103.80 Symmetrical Triangle Pattern Breakout
2 Amgen Inc. NASDAQ: AMGN $234.82 $237.00 Falling Wedge Pattern Breakout
3 Texas Instruments Incorporated NASDAQ: TXN $184.32 $185.60 Ascending Triangle Pattern
4 Avantor, Inc. NYSE: AVTR $23.00 $23.10 Falling Wedge Pattern Breakout
5 Equity LifeStyle Properties, Inc. NYSE: ELS $72.00 $72.60 Symmetrical Triangle Pattern Breakout
6 Digital World Acquisition Corp. NASDAQ: DWAC $20.08 $20.60 Falling Wedge Pattern Breakout
7 Ardmore Shipping Corporation NYSE: ASC $12.18 $13.10 Flag Pattern
8 Repligen Corporation NASDAQ: RGEN $175.34 $177.20 Falling Wedge Pattern Breakout
9 Centene Corporation NYSE: CNC $70.63 $71.50 Breakout From Consolidation Area
10 Autoliv, Inc. NYSE: ALV $102.78 $103.50 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 Starbucks Corporation (NASDAQ: SBUX)

Sector: Consumer Cyclical | Restaurants

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 SBUX is if the stock closes above the immediate resistance level of $103.80. This is marked in the chart below as a green color dotted line.

Daily chart – SBUX

SBUX – Symmetrical Triangle Pattern Breakout

#2 Amgen Inc. (NASDAQ: AMGN)

Sector: Healthcare | Drug Manufacturers – General

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 AMGN is above the nearest resistance level of $237.00. This is marked in the chart below as a green color dotted line.

Daily chart – AMGN

AMGN – Falling Wedge Pattern Breakout

#3 Texas Instruments Incorporated (NASDAQ: TXN)

Sector: Technology | Semiconductors

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 TXN is if the stock breaks out of the ascending triangle pattern and has a daily close above the near-term resistance level of $185.60. This is marked in the chart below as a green color dotted line.

Daily chart – TXN

TXN – Ascending Triangle Pattern

#4 Avantor, Inc. (NYSE: AVTR)

Sector: Basic Materials | Specialty Chemicals

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 AVTR is above the nearest resistance level of $23.10. This is marked in the chart below as a green color dotted line.

Daily chart – AVTR

AVTR – Falling Wedge Pattern Breakout

#5 Equity LifeStyle Properties, Inc. (NYSE: ELS)

Sector: Real Estate | REIT – Residential

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 ELS is if the stock closes above the immediate resistance level of $72.60. This is marked in the chart below as a green color dotted line.

Daily chart – ELS

ELS – Symmetrical Triangle Pattern Breakout

#6 Digital World Acquisition Corp. (NASDAQ: DWAC)

Sector: Financial | Shell Companies

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 DWAC is above the nearest resistance level of $20.60. This is marked in the chart below as a green color dotted line.

Daily chart – DWAC

DWAC – Falling Wedge Pattern Breakout

#7 Ardmore Shipping Corporation (NYSE: ASC)

Sector: Industrials | Marine Shipping

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 ASC is if the stock breaks out of the flag pattern, at around  $13.10. This is marked in the chart below as a green color dotted line.

Daily chart – ASC

ASC – Flag Pattern

#8 Repligen Corporation (NASDAQ: RGEN)

Sector: Healthcare | Medical Instruments & Supplies

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 RGEN is above the nearest resistance level of $177.20. This is marked in the chart below as a green color dotted line.

Daily chart – RGEN

RGEN – Falling Wedge Pattern Breakout

#9 Centene Corporation (NYSE: CNC)

Sector: Healthcare | Healthcare Plans

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 CNC is above the near-term resistance area, which translates to a price of around $71.50. This is marked in the chart below as a green color dotted line.

Daily chart – CNC

CNC – Breakout From Consolidation Area

#10 Autoliv, Inc. (NYSE: ALV)

Sector: Consumer Cyclical | Auto Parts

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 ALV is if the stock closes above the immediate resistance level of $103.50. This is marked in the chart below as a green color dotted line.

Daily chart – ALV

ALV – Symmetrical Triangle Pattern Breakout

Happy Trading!

Trades of The Day Research Team

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Source: Trades of the Day