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 | ServiceNow Inc. | NYSE: NOW | $783.50 | $790.60 | Flag Pattern Breakout |
| 2 | Vital Energy Inc. | NYSE: VTLE | $56.78 | $57.00 | Symmetrical Triangle Pattern Breakout |
| 3 | Nutrien Ltd | NYSE: NTR | $56.76 | $57.60 | Downtrend Channel Breakout |
| 4 | Roivant Sciences Ltd | NASDAQ: ROIV | $11.74 | $11.90 | Symmetrical Triangle Pattern |
| 5 | Conagra Brands Inc. | NYSE: CAG | $31.09 | $31.30 | Ascending Triangle Pattern Breakout |
| 6 | Occidental Petroleum Corp. | NYSE: OXY | $69.25 | $69.60 | Symmetrical Triangle Pattern Breakout |
| 7 | Newmont Corp | NYSE: NEM | $39.65 | $41.80 | Downtrend Channel |
| 8 | A-Mark Precious Metals Inc. | NASDAQ: AMRK | $32.73 | $33.70 | Symmetrical Triangle Pattern Breakout |
| 9 | Pan American Silver Corp | NYSE: PAAS | $17.53 | $18.20 | Downtrend Channel Breakout |
| 10 | RTX Corp | NYSE: RTX | $101.69 | $102.50 | 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 ServiceNow Inc. (NYSE: NOW)
Sector: Technology • Software – Application
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 NOW is above the near-term resistance level of $790.60. This is marked in the chart below as a green color dotted line.
Daily chart – NOW
NOW – Flag Pattern Breakout
#2 Vital Energy Inc. (NYSE: VTLE)
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 VTLE is if the stock closes above the immediate resistance level of $57.00. This is marked in the chart below as a green color dotted line.
Daily chart – VTLE
VTLE – Symmetrical Triangle Pattern Breakout
#3 Nutrien Ltd (NYSE: NTR)
Sector: Basic Materials • Agricultural Inputs
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 NTR is if the stock has a daily close above $57.60. This is marked in the chart below as a green color dotted line.
Daily chart – NTR
NTR – Downtrend Channel Breakout
#4 Roivant Sciences Ltd (NASDAQ: ROIV)
Sector: Healthcare • Biotechnology
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 ROIV is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $11.90. This is marked in the chart below as a green color dotted line.
Daily chart – ROIV
ROIV – Symmetrical Triangle Pattern
#5 Conagra Brands Inc. (NYSE: CAG)
Sector: Consumer Defensive • Packaged Foods
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 CAG is if the stock has a daily close above the near-term resistance level of $31.30. This is marked in the chart below as a green color dotted line.
Daily chart – CAG
CAG – Ascending Triangle Pattern Breakout
#6 Occidental Petroleum Corp. (NYSE: OXY)
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 OXY is if the stock closes above the immediate resistance level of $69.60. This is marked in the chart below as a green color dotted line.
Daily chart – OXY
OXY – Symmetrical Triangle Pattern Breakout
#7 Newmont Corp (NYSE: NEM)
Sector: Basic Materials • Gold
Reason: Formation of a Downtrend Channel
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 is currently forming a downtrend channel. The ideal buy level for NEM is if the stock breaks out of the downtrend channel and has a daily close above $41.80. This is marked in the chart below as a green color dotted line.
Daily chart – NEM
NEM – Downtrend Channel
#8 A-Mark Precious Metals Inc. (NASDAQ: AMRK)
Sector: Financial • Capital Markets
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 AMRK is if the stock closes above the immediate resistance level of $33.70. This is marked in the chart below as a green color dotted line.
Daily chart – AMRK
AMRK – Symmetrical Triangle Pattern Breakout
#9 Pan American Silver Corp (NYSE: PAAS)
Sector: Basic Materials • Gold
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 PAAS is if the stock has a daily close above $18.20. This is marked in the chart below as a green color dotted line.
Daily chart – PAAS
PAAS – Downtrend Channel Breakout
#10 RTX Corp (NYSE: RTX)
Sector: Industrials • Aerospace & Defense
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 RTX is if the stock closes above the immediate resistance level of $102.50. This is marked in the chart below as a green color dotted line.
Daily chart – RTX
RTX – Symmetrical Triangle Pattern Breakout
Happy Trading!
Trades of The Day Research Team
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Source: Trades of the Day