The American publicly traded advertising company which consists of three major networks: McCann Worldgroup, Lowe and Partners, and FCB, Interpublic Group of Companies Inc. (NYSE: IPG) seems to be poised for a price surge as per its latest charts.
#1 Double Bottom: In the daily chart of IPG, a double bottom pattern is being currently formed. This is shown in the daily chart in purple color. A Double bottom pattern is a bullish reversal pattern, indicating that the stock could possibly move upwards shortly.
#2 Hammer: The latest candlestick is a hammer, indicating a potential reversal of the current downtrend.
#4 CCI moving near -100: The CCI indicator value is currently moving upwards to cross above -100, indicating possible bullishness.
#5 Near Support: The stock is currently near the gap support (shown as a blue dotted line). There is also the breakout level of the Inverted Head and Shoulders pattern (shown in orange color) nearby. These seem like a good support point for the stock to bounce back.
#6 Stochastic: As you can see from the daily chart, the %K line of the stochastic is currently above the %D line. This is a possible bullish sign.
#7 Cup and Handle Pattern: The weekly chart shows that a cup and handle pattern is being currently formed for the stock. This is marked in the chart in orange color. The cup and handle pattern is a consolidation and breakout pattern. The cup was formed between July 2017 and February 2018. Currently, the handle is being formed. If the stock breaks out of the cup and handle pattern with high volume, the stock can possibly give high returns.
#8 Price above Ichimoku Cloud: The price is currently above Ichimoku Cloud (red and green color lines) and baseline (brown color line). The conversion line (light blue color) is also above the baseline. The cloud is also changing color from red to green. All this indicate possible bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can buy the stock between the prices of $22 to $22.60.
TP: Our target prices are $26 and $32 in the next 3-6 months.
SL: To limit risk, place stop-loss at $19.40. Note that stop loss is on a closing basis.
Our target potential upside is 15% to 45% in the next 3-6 months.
- Entry at $22.00: For a risk of $2.60, our target rewards are $4 and $10. This is a nearly 1:2 and 1:4 risk-reward trade.
- Entry at $22.60: For a risk of $3.20, our target reward (TP#2) is $9.40. This is a 1:3 risk-reward trade.
In other words, this trade offers nearly 2x to 4x 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.