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 | Doximity Inc. | NYSE: DOCS | $35.60 | $36.00 | Symmetrical Triangle Pattern Breakout |
| 2 | Unity Software Inc. | NYSE: U | $15.54 | $16.70 | Downtrend Channel |
| 3 | Sweetgreen Inc. | NYSE: SG | $35.01 | $35.70 | Symmetrical Triangle Pattern Breakout |
| 4 | DigitalOcean Holdings Inc. | NYSE: DOCN | $32.57 | $33.30 | Falling Wedge Pattern |
| 5 | Expedia Group Inc. | NASDAQ: EXPE | $130.01 | $136.00 | Symmetrical Triangle Pattern Breakout |
| 6 | Adecoagro S.A. | NYSE: AGRO | $10.31 | $10.60 | Falling Wedge Pattern Breakout |
| 7 | Upstart Holdings Inc. | NASDAQ: UPST | $36.25 | $38.90 | Symmetrical Triangle Pattern Breakout |
| 8 | Iovance Biotherapeutics Inc. | NASDAQ: IOVA | $9.92 | $10.40 | Falling Wedge Pattern Breakout |
| 9 | Genpact Ltd | NYSE: G | $37.50 | $37.90 | Symmetrical Triangle Pattern Breakout |
| 10 | Companhia de Saneamento Basico do Estado de Sao Paulo. ADR | NYSE: SBS | $17.69 | $17.70 | 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 Doximity Inc. (NYSE: DOCS)
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 DOCS is if the stock closes above the immediate resistance level of $36.00. This is marked in the chart below as a green color dotted line.
Daily chart – DOCS
DOCS – Symmetrical Triangle Pattern Breakout
#2 Unity Software Inc. (NYSE: U)
Sector: Technology • Software – Application
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 U is if the stock breaks out of the downtrend channel and has a daily close above $16.70. This is marked in the chart below as a green color dotted line.
Daily chart – U
U – Downtrend Channel
#3 Sweetgreen Inc. (NYSE: SG)
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 SG is if the stock closes above the immediate resistance level of $35.70. This is marked in the chart below as a green color dotted line.
Daily chart – SG
SG – Symmetrical Triangle Pattern Breakout
#4 DigitalOcean Holdings Inc. (NYSE: DOCN)
Sector: Technology • Software – Infrastructure
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 DOCN is if the stock breaks out of the falling wedge pattern, at a price of around $33.30. This is marked in the chart below as a green color dotted line.
Daily chart – DOCN
DOCN – Falling Wedge Pattern
#5 Expedia Group Inc. (NASDAQ: EXPE)
Sector: Consumer Cyclical • Travel 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 EXPE is if the stock closes above the immediate resistance level of $136.00. This is marked in the chart below as a green color dotted line.
Daily chart – EXPE
EXPE – Symmetrical Triangle Pattern Breakout
#6 Adecoagro S.A. (NYSE: AGRO)
Sector: Consumer Defensive • Farm Products • Luxembourg
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 AGRO is above the nearest resistance level of $10.60. This is marked in the chart below as a green color dotted line.
Daily chart – AGRO
AGRO – Falling Wedge Pattern Breakout
#7 Upstart Holdings Inc. (NASDAQ: UPST)
Sector: Financial • Credit 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 UPST is if the stock closes above the immediate resistance level of $38.90. This is marked in the chart below as a green color dotted line.
Daily chart – UPST
UPST – Symmetrical Triangle Pattern Breakout
#8 Iovance Biotherapeutics Inc. (NASDAQ: IOVA)
Sector: Healthcare • Biotechnology
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 IOVA is above the nearest resistance level of $10.40. This is marked in the chart below as a green color dotted line.
Daily chart – IOVA
IOVA – Falling Wedge Pattern Breakout
#9 Genpact Ltd (NYSE: G)
Sector: Technology • Information Technology 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 G is if the stock closes above the immediate resistance level of $37.90. This is marked in the chart below as a green color dotted line.
Daily chart – G
G – Symmetrical Triangle Pattern Breakout
#10 Companhia de Saneamento Basico do Estado de Sao Paulo. ADR (NYSE: SBS)
Sector: Utilities • Utilities – Regulated Water
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 SBS is if the stock closes above the immediate resistance level of $17.70. This is marked in the chart below as a green color dotted line.
Daily chart – SBS
SBS – Symmetrical Triangle Pattern Breakout
Happy Trading!
Trades of The Day Research Team
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Source: Trades of the Day