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 offer a 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 | Microsoft Corporation | NASDAQ: MSFT | $435.28 | $440.00 | Falling Wedge Pattern Breakout |
| 2 | Liquidia Corp | NASDAQ: LQDA | $15.83 | $16.20 | Symmetrical Triangle Pattern Breakout |
| 3 | iRhythm Technologies Inc. | NASDAQ: IRTC | $131.12 | $133.50 | Uptrend Channel |
| 4 | Alphabet Inc. | NASDAQ: GOOGL | $164.03 | $164.40 | Downtrend Channel Breakout |
| 5 | Aurora Innovation Inc. | NASDAQ: AUR | $8.14 | $8.50 | Symmetrical Triangle Pattern Breakout |
| 6 | Goldman Sachs Group, Inc. | NYSE: GS | $566.10 | $573.30 | Falling Wedge Pattern Breakout |
| 7 | Hims & Hers Health Inc. | NYSE: HIMS | $40.82 | $42.50 | Symmetrical Triangle Pattern Breakout |
| 8 | NVIDIA Corp | NASDAQ: NVDA | $114.50 | $117.00 | Downtrend Channel |
| 9 | Maplebear Inc. | NASDAQ: CART | $45.22 | $45.60 | Symmetrical Triangle Pattern Breakout |
| 10 | Visa Inc. | NYSE: V | $347.60 | $350.50 | 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 Microsoft Corporation (NASDAQ: MSFT)
Sector: Technology • Software – Infrastructure
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 MSFT is above the nearest resistance level of $440.00. This is marked in the chart below as a green color dotted line.
Daily chart – MSFT
MSFT – Falling Wedge Pattern Breakout
#2 Liquidia Corp (NASDAQ: LQDA)
Sector: Healthcare • Biotechnology
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 LQDA is if the stock closes above the immediate resistance level of $16.20. This is marked in the chart below as a green color dotted line.
Daily chart – LQDA
LQDA – Symmetrical Triangle Pattern Breakout
#3 iRhythm Technologies Inc. (NASDAQ: IRTC)
Sector: Healthcare • Medical Devices
Reason: Formation of 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 ideal buy level for IRTC is if the stock breaks out of the uptrend channel and has a daily close above $133.50. This is marked in the chart below as a green color dotted line.
Daily chart – IRTC
IRTC – Uptrend Channel
#4 Alphabet Inc. (NASDAQ: GOOGL)
Sector: Communication Services • Internet Content & Information
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 GOOGL is if the stock has a daily close above $164.40. This is marked in the chart below as a green color dotted line.
Daily chart – GOOGL
GOOGL – Downtrend Channel Breakout
#5 Aurora Innovation Inc. (NASDAQ: AUR)
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 AUR is if the stock closes above the immediate resistance level of $8.50. This is marked in the chart below as a green color dotted line.
Daily chart – AUR
AUR – Symmetrical Triangle Pattern Breakout
#6 Goldman Sachs Group, Inc. (NYSE: GS)
Sector: Financial • Capital Markets
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 GS is above the nearest resistance level of $573.30. This is marked in the chart below as a green color dotted line.
Daily chart – GS
GS – Falling Wedge Pattern Breakout
#7 Hims & Hers Health Inc. (NYSE: HIMS)
Sector: Consumer Defensive • Household & Personal Products
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 HIMS is if the stock closes above the immediate resistance level of $42.50. This is marked in the chart below as a green color dotted line.
Daily chart – HIMS
HIMS – Symmetrical Triangle Pattern Breakout
#8 NVIDIA Corp (NASDAQ: NVDA)
Sector: Technology • Semiconductors
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 NVDA is if the stock breaks out of the downtrend channel and has a daily close above $117.00. This is marked in the chart below as a green color dotted line.
Daily chart – NVDA
NVDA – Downtrend Channel
#9 Maplebear Inc. (NASDAQ: CART)
Sector: Consumer Cyclical • Internet Retail
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 CART is if the stock closes above the immediate resistance level of $45.60. This is marked in the chart below as a green color dotted line.
Daily chart – CART
CART – Symmetrical Triangle Pattern Breakout
#10 Visa Inc. (NYSE: V)
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 V is if the stock closes above the immediate resistance level of $350.50. This is marked in the chart below as a green color dotted line.
Daily chart – V
V – Symmetrical Triangle Pattern Breakout
Happy Trading!
Trades of The Day Research Team
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Source: Trades of the Day
