The Technical Breakout Setups screen is designed to pinpoint stocks that combine strong underlying technical health with a favorable chart pattern for entry. The strategy hinges on two proprietary ChartMill scores: the Technical Rating (TA Rating), which measures the overall strength and direction of a stock’s trend, and the Setup Quality Score, which evaluates whether the stock is forming a consolidation pattern that could lead to a breakout. By filtering for stocks that score highly on both metrics, the screen aims to cut through market noise and present candidates where the odds of a sustained move may be tilted in the investor’s favor. We ran this screen recently, and one of the stocks that stood out was Westlake Corp (NYSE:WLK), a diversified industrial player with operations spanning chemicals, building products, and infrastructure.
Technical Strength: A Solid Foundation
Westlake Corp earns a strong technical rating of 9 out of 10, placing it firmly in the category of stocks with a clear uptrend. This score comes from several key factors, all of which align with the screen’s goal of finding securities with solid technical health. The long-term and short-term trends are both positive, a crucial combination for the strategy, as it suggests momentum is working across multiple timeframes. The stock is also outperforming 70% of its peers in the Chemicals industry, highlighting its relative strength in a sector that often moves in cycles.
Looking deeper at the ChartMill Technical Report, Westlake’s moving averages show a bullish picture. The 20-day SMA (116.89) is above the 50-day SMA (109.46), which is above the 100-day (93.94) and 200-day (86.22) — and all four are currently rising. This healthy alignment is a textbook signal of a stock in a strong, sustainable uptrend. While the S&P 500 is near new highs, Westlake’s year-to-date performance has been solid, though it has recently pulled back from its 52-week high of $124.23 to the current price of $114.28. This pullback, however, is not a negative in the context of the screen — it has created the very setup pattern we look for next.
- TA Rating: 9/10 — indicates strong technical health and bullish trend.
- Trends: Both long-term and short-term trends are positive, a key requirement for breakout candidates.
- Industry Standing: Outperforms 70% of stocks in the Chemicals sector.
- Moving Averages: All key SMAs (20, 50, 100, 200) are rising and in a bullish alignment.
Setup Quality: A Pattern Worth Watching
Beyond technical strength, the screen requires a setup score that signals a low-risk entry point. Westlake delivers here too, with a Setup Quality Score of 8 out of 10. This indicates the stock has been consolidating in a relatively tight range, reducing volatility and creating a base. In the most recent period, the price has been trading between $110.79 and $124.23 — a wide range of about 12% — but importantly, it is now testing the lower end of that range after a pullback. The setup summary notes that volatility is decreasing, which is a classic precursor to a breakout.
The technical report suggests a potential entry point near $114.50 — just above a resistance zone — with a stop loss at $112.60, placing the risk at roughly 1.66% of the stock’s value. The trade setup would commit up to 25% of capital for a controlled portfolio risk of just 0.41%. This tight stop is made possible by the consolidation pattern: the support zone around $112.61 provides a clear, nearby level for risk management. A pullback into this area while the broader technicals remain strong is exactly the kind of pattern the breakout screen is designed to catch — a pause before the next leg higher.
- Setup Rating: 8/10 — reflects consolidation and reduced volatility.
- Consolidation Range: Recent trading between $110.79 and $124.23, with a current price near the lower end.
- Suggested Entry: $114.50 (above resistance); Stop loss at $112.60 (below support).
- Risk Management: Maximum loss of 1.66% on the stock, with a tight 0.41% portfolio risk.
Where to Find More Setups
The combination of a strong TA Rating and high Setup Quality Score makes Westlake Corp an interesting candidate for technical traders following breakout strategies, but it is just one of several stocks that may meet these criteria in the current market environment. The S&P 500’s positive long-term and short-term trends are providing a favorable backdrop, and many stocks are forming similar patterns.
For a full, continuously updated list of stocks passing this Technical Breakout Setups screen, click here to explore more candidates in the screener.
Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Trading stocks involves risk, and past performance is not indicative of future results. Always conduct your own research and consider your risk tolerance before making any trading decisions.