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 | Cerence Inc. | NASDAQ: CRNC | $19.33 | $20.00 | Symmetrical Triangle Pattern Breakout |
| 2 | Oklo Inc. | NYSE: OKLO | $27.25 | $27.40 | Flag Pattern Breakout |
| 3 | Rivian Automotive Inc. | NASDAQ: RIVN | $16.49 | $17.50 | Symmetrical Triangle Pattern Breakout |
| 4 | Uber Technologies Inc. | NYSE: UBER | $64.59 | $66.20 | Downtrend Channel |
| 5 | Serve Robotics Inc. | NASDAQ: SERV | $19.03 | $20.00 | Symmetrical Triangle Pattern Breakout |
| 6 | Digimarc Corporation | NASDAQ: DMRC | $46.81 | $47.60 | Uptrend Channel Breakout |
| 7 | Informatica Inc. | NYSE: INFA | $26.50 | $27.00 | Symmetrical Triangle Pattern |
| 8 | Verra Mobility Corp | NASDAQ: VRRM | $24.22 | $25.00 | Symmetrical Triangle Pattern |
| 9 | Xponential Fitness Inc. | NYSE: XPOF | $15.26 | $16.40 | Symmetrical Triangle Pattern |
| 10 | ASE Technology Holding Co.Ltd ADR | NYSE: ASX | $10.21 | $10.60 | Symmetrical Triangle Pattern |
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 Cerence Inc. (NASDAQ: CRNC)
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 CRNC is if the stock closes above the immediate resistance level of $20.00. This is marked in the chart below as a green color dotted line.
Daily chart – CRNC
CRNC – Symmetrical Triangle Pattern Breakout
#2 Oklo Inc. (NYSE: OKLO)
Sector: Utilities • Utilities – Regulated Electric
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 OKLO is above the near-term resistance level of $27.40. This is marked in the chart below as a green color dotted line.
Daily chart – OKLO
OKLO – Flag Pattern Breakout
#3 Rivian Automotive Inc. (NASDAQ: RIVN)
Sector: Consumer Cyclical • Auto Manufacturers
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 RIVN is if the stock closes above the immediate resistance level of $17.50. This is marked in the chart below as a green color dotted line.
Daily chart – RIVN
RIVN – Symmetrical Triangle Pattern Breakout
#4 Uber Technologies Inc. (NYSE: UBER)
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 UBER is if the stock breaks out of the downtrend channel and has a daily close above $66.20. This is marked in the chart below as a green color dotted line.
Daily chart – UBER
UBER – Downtrend Channel
#5 Serve Robotics Inc. (NASDAQ: SERV)
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 SERV is if the stock closes above the immediate resistance level of $20.00. This is marked in the chart below as a green color dotted line.
Daily chart – SERV
SERV – Symmetrical Triangle Pattern Breakout
#6 Digimarc Corporation (NASDAQ: DMRC)
Sector: Technology • Information Technology Services
Reason: Breakout From an Uptrend Channel
An uptrend channel or an ascending channel is the price action contained between upward sloping parallel lines. It is formed by a lower trend line that connects the swing lows, and an upper channel line that joins the swing highs. A stock usually trades between the two rails of the uptrend channel before finally breaking out from the upper rail.
Buy Level(s): The stock has currently broken out of the uptrend channel. However, the ideal buy level for DMRC is if the stock has a daily close above the near-term resistance level of $47.60. This is marked in the chart below as a green color dotted line.
Daily chart – DMRC
DMRC – Uptrend Channel Breakout
#7 Informatica Inc. (NYSE: INFA)
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 INFA is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $27.00. This is marked in the chart below as a green color dotted line.
Daily chart – INFA
INFA – Symmetrical Triangle Pattern
#8 Verra Mobility Corp (NASDAQ: VRRM)
Sector: Industrials • Infrastructure Operations
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 VRRM is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $25.00. This is marked in the chart below as a green color dotted line.
Daily chart – VRRM
VRRM – Symmetrical Triangle Pattern
#9 Xponential Fitness Inc. (NYSE: XPOF)
Sector: Consumer Cyclical • Leisure
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 XPOF is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $16.40. This is marked in the chart below as a green color dotted line.
Daily chart – XPOF
XPOF – Symmetrical Triangle Pattern
#10 ASE Technology Holding Co.Ltd ADR (NYSE: ASX)
Sector: Technology • Semiconductors
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 ASX is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $10.60. This is marked in the chart below as a green color dotted line.
Daily chart – ASX
ASX – Symmetrical Triangle Pattern
Happy Trading!
Trades of The Day Research Team
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Source: Trades of the Day