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 | Southern Company | NYSE: SO | $98.29 | $98.40 | Uptrend Channel |
| 2 | Neogenomics Inc. | NASDAQ: NEO | $9.10 | $9.50 | Symmetrical Triangle Pattern Breakout |
| 3 | MP Materials Corporation | NYSE: MP | $78.43 | $83.80 | Flag Pattern Breakout |
| 4 | American Battery Technology Company | NASDAQ: ABAT | $6.75 | $7.20 | Uptrend Channel Breakout |
| 5 | Navitas Semiconductor Corp | NASDAQ: NVTS | $8.23 | $9.10 | Symmetrical Triangle Pattern |
| 6 | Cullinan Therapeutics Inc. | NASDAQ: CGEM | $7.40 | $7.60 | Falling Wedge Pattern Breakout |
| 7 | Applied Digital Corporation | NASDAQ: APLD | $33.99 | $38.80 | Uptrend Channel Breakout |
| 8 | Quoin Pharmaceuticals Ltd ADR | NASDAQ: QNRX | $20.50 | $22.80 | Breakout From Consolidation Area |
| 9 | Atlas Lithium Corporation | NASDAQ: ATLX | $6.30 | $6.60 | Symmetrical Triangle Pattern |
| 10 | Uranium Energy Corp | AMEX: UEC | $14.65 | $15.10 | Uptrend Channel |
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 Southern Company (NYSE: SO)
Sector: Utilities • Utilities – Regulated Electric
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 SO is if the stock breaks out of the uptrend channel and has a daily close above $98.40. This is marked in the chart below as a green color dotted line.
Daily chart – SO
SO – Uptrend Channel
#2 Neogenomics Inc. (NASDAQ: NEO)
Sector: Healthcare • Diagnostics & Research
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 NEO is if the stock closes above the immediate resistance level of $9.50. This is marked in the chart below as a green color dotted line.
Daily chart – NEO
NEO – Symmetrical Triangle Pattern Breakout
#3 MP Materials Corporation (NYSE: MP)
Sector: Basic Materials • Other Industrial Metals & Mining
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 MP is above the near-term resistance level of $83.80. This is marked in the chart below as a green color dotted line.
Daily chart – MP
MP – Flag Pattern Breakout
#4 American Battery Technology Company (NASDAQ: ABAT)
Sector: Industrials • Waste Management
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 ABAT is if the stock has a daily close above the near-term resistance level of $7.20. This is marked in the chart below as a green color dotted line.
Daily chart – ABAT
ABAT – Uptrend Channel Breakout
#5 Navitas Semiconductor Corp (NASDAQ: NVTS)
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 NVTS is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $9.10. This is marked in the chart below as a green color dotted line.
Daily chart – NVTS
NVTS – Symmetrical Triangle Pattern
#6 Cullinan Therapeutics Inc. (NASDAQ: CGEM)
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 CGEM is above the nearest resistance level of $7.60. This is marked in the chart below as a green color dotted line.
Daily chart – CGEM
CGEM – Falling Wedge Pattern Breakout
#7 Applied Digital Corporation (NASDAQ: APLD)
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 APLD is if the stock has a daily close above the near-term resistance level of $38.80. This is marked in the chart below as a green color dotted line.
Daily chart – APLD
APLD – Uptrend Channel Breakout
#8 Quoin Pharmaceuticals Ltd ADR (NASDAQ: QNRX)
Sector: Healthcare • Biotechnology
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 QNRX is above the near-term resistance area, which translates to a price of around $22.80. This is marked in the chart below as a green color dotted line.
Daily chart – QNRX
QNRX – Breakout From Consolidation Area
#9 Atlas Lithium Corporation (NASDAQ: ATLX)
Sector: Basic Materials • Other Industrial Metals & Mining
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 ATLX is if the stock has a daily close above the breakout level of the symmetrical triangle pattern, at around $6.60. This is marked in the chart below as a green color dotted line.
Daily chart – ATLX
ATLX – Symmetrical Triangle Pattern
#10 Uranium Energy Corp (AMEX: UEC)
Sector: Energy • Uranium
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 UEC is if the stock breaks out of the uptrend channel and has a daily close above $15.10. This is marked in the chart below as a green color dotted line.
Daily chart – UEC
UEC – Uptrend Channel
Happy Trading!
Trades of The Day Research Team
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Source: Trades of the Day
