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 | Blue Owl Capital Inc. | NYSE: OWL | $11.26 | $11.30 | Symmetrical Triangle Pattern Breakout |
| 2 | Atomera Incorporated | NASDAQ: ATOM | $7.90 | $8.30 | Falling Wedge Pattern Breakout |
| 3 | Cytek Biosciences, Inc. | NASDAQ: CTKB | $11.48 | $12.00 | Downtrend Channel |
| 4 | New York Community Bancorp, Inc. | NYSE: NYCB | $10.69 | $10.80 | Symmetrical Triangle Pattern Breakout |
| 5 | Warner Music Group Corp. | NASDAQ: WMG | $30.47 | $32.10 | Symmetrical Triangle Pattern |
| 6 | PetMed Express, Inc. | NASDAQ: PETS | $15.37 | $15.90 | Falling Wedge Pattern Breakout |
| 7 | Kirby Corporation | NYSE: KEX | $71.84 | $72.10 | Symmetrical Triangle Pattern Breakout |
| 8 | Rain Oncology Inc. | NASDAQ: RAIN | $162.40 | $163.70 | Falling Wedge Pattern Breakout |
| 9 | Comcast Corporation | NASDAQ: CMCSA | $41.37 | $41.80 | Symmetrical Triangle Pattern Breakout |
| 10 | Valley National Bancorp | NASDAQ: VLY | $9.38 | $9.60 | Falling Wedge 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 Blue Owl Capital Inc. (NYSE: OWL)
Sector: Financial | Asset Management
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 OWL is if the stock closes above the immediate resistance level of $11.30. This is marked in the chart below as a green color dotted line.
Daily chart – OWL
OWL – Symmetrical Triangle Pattern Breakout
#2 Atomera Incorporated (NASDAQ: ATOM)
Sector: Technology | Semiconductor Equipment & Materials
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 ATOM is above the nearest resistance level of $8.30. This is marked in the chart below as a green color dotted line.
Daily chart – ATOM
ATOM – Falling Wedge Pattern Breakout
#3 Cytek Biosciences, Inc. (NASDAQ: CTKB)
Sector: Healthcare | Medical Devices
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 CTKB is if the stock breaks out of the downtrend channel and has a daily close above $12.00. This is marked in the chart below as a green color dotted line.
Daily chart – CTKB
CTKB – Downtrend Channel
#4 New York Community Bancorp, Inc. (NYSE: NYCB)
Sector: Financial | Banks – Regional
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 NYCB is if the stock closes above the immediate resistance level of $10.80. This is marked in the chart below as a green color dotted line.
Daily chart – NYCB
NYCB – Symmetrical Triangle Pattern Breakout
#5 Warner Music Group Corp. (NASDAQ: WMG)
Sector: Communication Services | Entertainment
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 WMG is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $32.10. This is marked in the chart below as a green color dotted line.
Daily chart – WMG
WMG – Symmetrical Triangle Pattern
#6 PetMed Express, Inc. (NASDAQ: PETS)
Sector: Healthcare | Pharmaceutical Retailers
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 PETS is above the nearest resistance level of $15.90. This is marked in the chart below as a green color dotted line.
Daily chart – PETS
PETS – Falling Wedge Pattern Breakout
#7 Kirby Corporation (NYSE: KEX)
Sector: Industrials | Marine Shipping
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 KEX is if the stock closes above the immediate resistance level of $72.10. This is marked in the chart below as a green color dotted line.
Daily chart – KEX
KEX – Symmetrical Triangle Pattern Breakout
#8 Rain Oncology Inc. (NASDAQ: RAIN)
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 RAIN is above the nearest resistance level of $163.70. This is marked in the chart below as a green color dotted line.
Daily chart – RAIN
RAIN – Falling Wedge Pattern Breakout
#9 Comcast Corporation (NASDAQ: CMCSA)
Sector: Communication Services | Telecom 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 CMCSA is if the stock closes above the immediate resistance level of $41.80. This is marked in the chart below as a green color dotted line.
Daily chart – CMCSA
CMCSA – Symmetrical Triangle Pattern Breakout
#10 Valley National Bancorp (NASDAQ: VLY)
Sector: Financial | Banks – Regional
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 VLY is above the nearest resistance level of $9.60. This is marked in the chart below as a green color dotted line.
Daily chart – VLY
VLY – Falling Wedge Pattern Breakout
Happy Trading!
Trades of The Day Research Team
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Source: Trades of the Day