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 | Riot Platforms Inc. | NASDAQ: RIOT | $12.03 | $12.80 | Symmetrical Triangle Pattern |
| 2 | Starbucks Corp. | NASDAQ: SBUX | $79.27 | $83.00 | Downtrend Channel |
| 3 | Serve Robotics Inc. | NASDAQ: SERV | $7.55 | $8.60 | Breakout From Consolidation Area |
| 4 | Coinbase Global Inc. | NASDAQ: COIN | $257.79 | $262.00 | Symmetrical Triangle Pattern Breakout |
| 5 | Albertsons Companies Inc. | NYSE: ACI | $20.00 | $20.20 | Falling Wedge Pattern |
| 6 | Genmab ADR | NASDAQ: GMAB | $27.75 | $29.10 | Downtrend Channel |
| 7 | Praxis Precision Medicines Inc. | NASDAQ: PRAX | $54.96 | $57.10 | Flag Pattern Breakout |
| 8 | R1 RCM Inc. | NASDAQ: RCM | $13.29 | $13.75 | Symmetrical Triangle Pattern Breakout |
| 9 | Blackstone Inc. | NYSE: BX | $138.59 | $142.00 | Breakout From Consolidation Area |
| 10 | Schlumberger Ltd. | NYSE: SLB | $49.67 | $54.00 | Downtrend Channel |
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 Riot Platforms Inc. (NASDAQ: RIOT)
Sector: Financial • Capital Markets
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 RIOT is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $12.80. This is marked in the chart below as a green color dotted line.
Daily chart – RIOT
RIOT – Symmetrical Triangle Pattern
#2 Starbucks Corp. (NASDAQ: SBUX)
Sector: Consumer Cyclical • Restaurants
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 SBUX is if the stock breaks out of the downtrend channel and has a daily close above $83.00. This is marked in the chart below as a green color dotted line.
Daily chart – SBUX
SBUX – Downtrend Channel
#3 Serve Robotics Inc. (NASDAQ: SERV)
Sector: Industrials • Specialty Industrial Machinery
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 SERV is above the near-term resistance area, which translates to a price of around $8.60. This is marked in the chart below as a green color dotted line.
Daily chart – SERV
SERV – Breakout From Consolidation Area
#4 Coinbase Global Inc. (NASDAQ: COIN)
Sector: Financial • Financial Data & Stock Exchanges
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 COIN is if the stock closes above the immediate resistance level of $262.00. This is marked in the chart below as a green color dotted line.
Daily chart – COIN
COIN – Symmetrical Triangle Pattern Breakout
#5 Albertsons Companies Inc. (NYSE: ACI)
Sector: Consumer Defensive • Grocery Stores
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 ACI is if the stock breaks out of the falling wedge pattern, at a price of around $20.20. This is marked in the chart below as a green color dotted line.
Daily chart – ACI
ACI – Falling Wedge Pattern
#6 Genmab ADR (NASDAQ: GMAB)
Sector: Healthcare • Biotechnology
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 GMAB is if the stock breaks out of the downtrend channel and has a daily close above $29.10. This is marked in the chart below as a green color dotted line.
Daily chart – GMAB
GMAB – Downtrend Channel
#7 Praxis Precision Medicines Inc. (NASDAQ: PRAX)
Sector: Healthcare • Biotechnology
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 PRAX is above the near-term resistance level of $57.10. This is marked in the chart below as a green color dotted line.
Daily chart – PRAX
PRAX – Flag Pattern Breakout
#8 R1 RCM Inc. (NASDAQ: RCM)
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 RCM is if the stock closes above the immediate resistance level of $13.75. This is marked in the chart below as a green color dotted line.
Daily chart – RCM
RCM – Symmetrical Triangle Pattern Breakout
#9 Blackstone Inc. (NYSE: BX)
Sector: Financial • Asset Management
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 BX is above the near-term resistance area, which translates to a price of around $142.00. This is marked in the chart below as a green color dotted line.
Daily chart – BX
BX – Breakout From Consolidation Area
#10 Schlumberger Ltd. (NYSE: SLB)
Sector: Energy • Oil & Gas Equipment & Services
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 SLB is if the stock breaks out of the downtrend channel and has a daily close above $54.00. This is marked in the chart below as a green color dotted line.
Daily chart – SLB
SLB – Downtrend Channel
Happy Trading!
Trades of The Day Research Team
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Source: Trades of the Day