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’ve identified 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 | SoundHound AI Inc. | NASDAQ: SOUN | $7.20 | $7.50 | Symmetrical Triangle Pattern Breakout |
| 2 | American Axle & Manufacturing Holdings Inc. | NYSE: AXL | $6.77 | $6.90 | Falling Wedge Pattern Breakout |
| 3 | DraftKings Inc. | NASDAQ: DKNG | $40.13 | $41.30 | Symmetrical Triangle Pattern |
| 4 | Flywire Corp | NASDAQ: FLYW | $20.99 | $21.50 | Breakout From Consolidation Area |
| 5 | Pagaya Technologies Ltd | NASDAQ: PGY | $14.62 | $15.40 | Symmetrical Triangle Pattern |
| 6 | Fortrea Holdings Inc. | NASDAQ: FTRE | $23.50 | $24.30 | Falling Wedge Pattern Breakout |
| 7 | American Superconductor Corp | NASDAQ: AMSC | $34.14 | $35.00 | Symmetrical Triangle Pattern Breakout |
| 8 | Mind Medicine Inc. | NASDAQ: MNMD | $8.49 | $9.50 | Downtrend Channel Breakout |
| 9 | Applied Optoelectronics Inc. | NASDAQ: AAOI | $27.76 | $28.70 | Symmetrical Triangle Pattern Breakout |
| 10 | Deckers Outdoor Corp | NYSE: DECK | $175.61 | $177.90 | 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 SoundHound AI Inc. (NASDAQ: SOUN)
Sector: Technology • Software – Application
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 SOUN is if the stock closes above the immediate resistance level of $7.50. This is marked in the chart below as a green color dotted line.
Daily chart – SOUN
SOUN – Symmetrical Triangle Pattern Breakout
#2 American Axle & Manufacturing Holdings Inc. (NYSE: AXL)
Sector: Consumer Cyclical • Auto Parts
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 AXL is above the nearest resistance level of $6.90. This is marked in the chart below as a green color dotted line.
Daily chart – AXL
AXL – Falling Wedge Pattern Breakout
#3 DraftKings Inc. (NASDAQ: DKNG)
Sector: Consumer Cyclical • Gambling
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 DKNG is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $41.30. This is marked in the chart below as a green color dotted line.
Daily chart – DKNG
DKNG – Symmetrical Triangle Pattern
#4 Flywire Corp 9NASDAQ: FLYW)
Sector: Technology • Software – Infrastructure
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 FLYW is above the near-term resistance area, which translates to a price of around $21.50. This is marked in the chart below as a green color dotted line.
Daily chart – FLYW
FLYW – Breakout From Consolidation Area
#5 Pagaya Technologies Ltd (NASDAQ: PGY)
Sector: Technology • Software – Infrastructure
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 PGY is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $15.40. This is marked in the chart below as a green color dotted line.
Daily chart – PGY
PGY – Symmetrical Triangle Pattern
#6 Fortrea Holdings Inc. 9NASDAQ: FTRE)
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 FIRE is above the nearest resistance level of $24.30. This is marked in the chart below as a green color dotted line.
Daily chart – FTRE
FTRE – Falling Wedge Pattern Breakout
#7 American Superconductor Corp (NASDAQ: AMSC)
Sector: Industrials • Specialty Industrial Machinery
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 AMSC is if the stock closes above the immediate resistance level of $35.00. This is marked in the chart below as a green color dotted line.
Daily chart – AMSC
AMSC – Symmetrical Triangle Pattern Breakout
#8 Mind Medicine Inc. (NASDAQ: MNMD)
Sector: Healthcare • Biotechnology
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 MNMD is if the stock has a daily close above $9.50. This is marked in the chart below as a green color dotted line.
Daily chart – MNMD
MNMD – Downtrend Channel Breakout
#9 Applied Optoelectronics Inc. (NASDAQ: AAOI)
Sector: Technology • Communication Equipment
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 AAOI is if the stock closes above the immediate resistance level of $28.70. This is marked in the chart below as a green color dotted line.
Daily chart – AAOI
AAOI – Symmetrical Triangle Pattern Breakout
#10 Deckers Outdoor Corp (NYSE: DECK)
Sector: Consumer Cyclical • Footwear & Accessories
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 DECK is if the stock closes above the immediate resistance level of $177.90. This is marked in the chart below as a green color dotted line.
Daily chart – DECK
DECK – Symmetrical Triangle Pattern Breakout
Happy Trading!
Trades of The Day Research Team
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