This Stock Could Move Upwards Shortly

The information technology supply chain services company offering services to original equipment manufacturers, software publishers and reseller customers, SYNNEX Corporation (NYSE: SNX) seems to be poised for a price surge as per its latest charts.

Bullish Indications

#1 Double Bottom: In the daily chart of SNX, a double bottom pattern is being currently formed. This is shown in the daily chart in orange color. A Double bottom pattern is a bullish reversal pattern, indicating that the stock could possibly move upwards shortly.

Daily Chart – SNX

#2 RSI oversold: In the daily chart, RSI is currently oversold, indicating a possible bullish reversal.

 #3 Bullish Stochastic: Stochastic is moving up from below oversold levels.

This indicates a bullish bias.

#4 CCI moving above -100: The CCI indicator value has currently crossed above -100 after moving higher from below -200.

This indicates possible bullishness.

#5 Near Support: As you can see from the weekly chart, the stock is currently trading near a long-term support level (shown as a green dotted line).

This seems like a good support point for the stock to bounce back.

Weekly Chart – SNX

#6 Bullish Candlestick pattern: The weekly chart of SNX shows that the stock had formed a bullish candlestick reversal pattern called piercing line pattern. This is marked as a pink ellipse. The stock has gapped down at the start of the week and closed higher till the mid-point of the previous week’s candle. This indicates bullishness.

#7 Double Bottom Pattern: The stock is currently forming a double bottom pattern in the weekly chart as well. A Double bottom pattern is a bullish reversal pattern, indicating that the stock could possibly move upwards shortly.

#8 RSI near oversold: In the daily chart, RSI is currently near oversold levels, indicating that a possible bullish reversal is around the corner.

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 $95 to $100.

TP: Our target prices are $115 and $135 in the next 3-6 months.

SL: To limit risk, place stop-loss at $92.80. Note that stop loss is on a closing basis.

Our target potential upside is 15% to 42% in the next 3-6 months.

  • Entry at $95: For a risk of $2.20, our target rewards are $20.00 and $40.00. This is a nearly 1:9 and 1:18 risk-reward trade.
  • Entry at $100: For a risk of $7.20, our target rewards are $15.00 and $35.00. This is a 1:2 and 1:5 risk-reward trade.

In other words, this trade offers nearly 2x to 9x 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.

Happy Trading!

Tara

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