American multinational private equity, alternative asset management, and financial services firm based in New York City, Blackstone Group LP (NYSE: BX) seems to be poised for a price surge as per its latest charts.
#1 Double Bottom: The daily chart of BX shows that the stock is currently forming the second bottom of the double bottom pattern. This is marked in the chart in pink color. A Double bottom pattern is a bullish reversal pattern, indicating that the stock could possibly move upwards shortly.
#2 RSI Strong: In the daily chart, the RSI is above 50 and moving up, indicating strength.
#3 Strong Stochastic: As you can see from the daily chart, the %K line (blue color) is currently above the %D line (orange color), indicating a bullish bias.
In addition to these, there are various bullish signs as per the daily chart.
The stock’s parabolic SAR indicator is currently below the price.
The MACD indicator shows that the MACD line is above the signal line. All these indicate that the bulls are currently in control.
#5 Unbroken Uptrend in Weekly Chart: As evident from the weekly chart, the stock is in an uptrend as it has been forming higher highs and higher lows for the past several weeks.
The stock had formed a reversal candle during the week ending May 14, 2018. It has since then moved up during the week that followed (last week). The is expected to continue this upmove.
#6 Strong RSI: The RSI is nearing 50 and moving up, indicating that the stock price may move to the upside.
#7 Support near 61.8% Fibonacci retracement level: Usually, after an up-move, stocks retraces to any of the key Fibonacci levels before surging back again. BX had taken support at 61.8% Fibonacci support level as seen in the weekly chart. Currently, the stock is near the 61.8% retracement level again, which is a good support level.
#8 CCI moving up: The CCI is above -100 and moving up, indicating overall bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase the shares of BX at the current price of $31.92.
TP: Our target prices are $37 and $45 in the next 4-6 months.
SL: To limit risk, place stop-loss at $29.50. Note that stop loss is on a closing basis.
Our target potential upside is 16% to 41% in the next 4-6 months. For a risk of $2.42, our target rewards are $5.08 and $13.08. This is a 1:2 and 1:5 risk-reward trade. In other words, this trade offers nearly 2x to 5x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the double bottom pattern with a high volume. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any regulatory changes in the sector.
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