By Trades Of The Day Research Team, Trades Of The Day, 2024-09-16
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 | Compania de Minas Buenaventura S.A. ADR | NYSE: BVN | $13.53 | $13.90 | Falling Wedge Pattern Breakout |
| 2 | RH | NYSE: RH | $321.87 | $330.60 | Symmetrical Triangle Pattern Breakout |
| 3 | CCC Intelligent Solutions Holdings Inc. | NASDAQ: CCCS | $10.89 | $11.10 | Downtrend Channel |
| 4 | ZoomInfo Technologies Inc. | NASDAQ: ZI | $10.62 | $11.00 | Falling Wedge Pattern |
| 5 | Core Scientific Inc. | NASDAQ: CORZ | $11.18 | $11.30 | Symmetrical Triangle Pattern Breakout |
| 6 | Immunome Inc. | NASDAQ: IMNM | $15.97 | $16.50 | Consolidation Area |
| 7 | PureCycle Technologies Inc. | NASDAQ: PCT | $8.82 | $9.40 | Uptrend Channel Breakout |
| 8 | Super Micro Computer Inc. | NASDAQ: SMCI | $457.16 | $468.00 | Falling Wedge Pattern |
| 9 | Magnite Inc. | NASDAQ: MGNI | $14.08 | $14.20 | Symmetrical Triangle Pattern Breakout |
| 10 | Signet Jewelers Ltd | NYSE: SIG | $91.15 | $92.30 | 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 Compania de Minas Buenaventura S.A. ADR (NYSE: BVN)
Sector:
Basic Materials • Other Precious Metals & Mining
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 BVN is above the nearest resistance level of $13.90. This is marked in the chart below as a green color dotted line.
BVN – Falling Wedge Pattern Breakout
#2 RH (NYSE: RH)
Sector:
Consumer Cyclical • Specialty 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 RH is if the stock closes above the immediate resistance level of $330.60. This is marked in the chart below as a green color dotted line.
RH – Symmetrical Triangle Pattern Breakout
#3 CCC Intelligent Solutions Holdings Inc. (NASDAQ: CCCS)
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 CCCS is if the stock breaks out of the downtrend channel and has a daily close above $11.10. This is marked in the chart below as a green color dotted line.
CCCS – Downtrend Channel
#4 ZoomInfo Technologies Inc. (NASDAQ: ZI)
Sector:
Technology • Software – Application
Reason:
Formation of a Falling Wedge Pattern
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 ideal buy level for ZI is if the stock breaks out of the falling wedge pattern, at a price of around $11.00. This is marked in the chart below as a green color dotted line.
ZI – Falling Wedge Pattern
#5 Core Scientific Inc. (NASDAQ: CORZ)
Sector:
Technology • Software – Infrastructure
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 CORZ 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.
CORZ – Symmetrical Triangle Pattern Breakout
#6 Immunome Inc. (NASDAQ: IMNM)
Sector:
Healthcare • Biotechnology
Reason:
Formation of 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):
The ideal buy level for IMNM is above the breakout level of the consolidation area, at around $16.50. This is marked in the chart below as a green color dotted line.
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