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 | Apartment Investment & Management Co. | NYSE: AIV | $7.99 | $8.10 | Symmetrical Triangle Pattern Breakout |
| 2 | Dominos Pizza Inc. | NYSE: DPZ | $458.42 | $460.20 | Flag Pattern Breakout |
| 3 | Chesapeake Energy Corp. | NASDAQ: CHK | $86.31 | $87.20 | Symmetrical Triangle Pattern Breakout |
| 4 | Atmus Filtration Technologies Inc. | NYSE: ATMU | $29.50 | $29.80 | Ascending Triangle Pattern Breakout |
| 5 | Becton Dickinson & Co. | NYSE: BDX | $246.25 | $247.40 | Consolidation Area |
| 6 | Aemetis Inc. | NASDAQ: AMTX | $5.57 | $5.90 | Falling Wedge Pattern Breakout |
| 7 | Clear Secure Inc. | NYSE: YOU | $20.50 | $20.70 | Symmetrical Triangle Pattern |
| 8 | BILL Holdings Inc. | NYSE: BILL | $68.05 | $68.90 | Symmetrical Triangle Pattern Breakout |
| 9 | Canopy Growth Corporation | NASDAQ: CGC | $7.69 | $8.05 | Falling Wedge Pattern Breakout |
| 10 | Agiliti Inc. | NYSE: AGTI | $10.17 | $10.30 | 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 Apartment Investment & Management Co. (NYSE: AIV)
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 AIV is if the stock closes above the immediate resistance level of $8.10. This is marked in the chart below as a green color dotted line.
Daily chart – AIV
AIV – Symmetrical Triangle Pattern Breakout
#2 Dominos Pizza Inc. (NYSE: DPZ)
Sector: Consumer Cyclical • Restaurants
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 DPZ is above the near-term resistance level of $460.20. This is marked in the chart below as a green color dotted line.
Daily chart – DPZ
DPZ – Flag Pattern Breakout
#3 Chesapeake Energy Corp. (NASDAQ: CHK)
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 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 CHK is if the stock closes above the immediate resistance level of $87.20. This is marked in the chart below as a green color dotted line.
Daily chart – CHK
CHK – Symmetrical Triangle Pattern Breakout
#4 Atmus Filtration Technologies Inc. (NYSE: ATMU)
Sector: Industrials • Pollution & Treatment Controls
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 ATMU is if the stock has a daily close above the near-term resistance level of $29.80. This is marked in the chart below as a green color dotted line.
Daily chart – ATMU
ATMU – Ascending Triangle Pattern Breakout
#5 Becton Dickinson & Co. (NYSE: BDX)
Sector: Healthcare • Medical Instruments & Supplies
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 BDX is above the breakout level of the consolidation area, at around $247.40. This is marked in the chart below as a green color dotted line.
Daily chart – BDX
BDX – Consolidation Area
#6 Aemetis Inc. (NASDAQ: AMTX)
Sector: Energy • Oil & Gas Refining & Marketing
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 AMTX is above the nearest resistance level of $5.90. This is marked in the chart below as a green color dotted line.
Daily chart – AMTX
AMTX – Falling Wedge Pattern Breakout
#7 Clear Secure Inc. (NYSE: YOU)
Sector: Technology • Software – Application
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 YOU is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $20.70. This is marked in the chart below as a green color dotted line.
Daily chart – YOU
YOU – Symmetrical Triangle Pattern
#8 BILL Holdings Inc. (NYSE: BILL)
Sector: Technology • Software – Application
Reason: Breakout From 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 stock has currently broken out of a symmetrical triangle pattern. However, the ideal buy level for BILL is if the stock closes above the immediate resistance level of $68.90. This is marked in the chart below as a green color dotted line.
Daily chart – BILL
BILL – Symmetrical Triangle Pattern Breakout
#9 Canopy Growth Corporation (NASDAQ: CGC)
Sector: Healthcare • Drug Manufacturers – Specialty & Generic
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 CGC is above the nearest resistance level of $8.05. This is marked in the chart below as a green color dotted line.
Daily chart – CGC
CGC – Falling Wedge Pattern Breakout
#10 Agiliti Inc. (NYSE: AGTI)
Sector: Healthcare • Health Information 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 AGTI is if the stock closes above the immediate resistance level of $10.30. This is marked in the chart below as a green color dotted line.
Daily chart – AGTI
AGTI – Symmetrical Triangle Pattern Breakout
Happy Trading!
Trades of The Day Research Team
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Source: Trades of the Day