The popular American corporation that owns and manages the racing facilities that host NASCAR, IndyCar Series, NHRA, World of Outlaws, and other motor racing series, Speedway Motorsports, Inc. (NYSE: TRK), shows signs of an upcoming price surge according to its latest charts.
[hana-code-insert name=’adsense-article’ /]#1 Falling Wedge: The daily chart of TRK shows that the stock has been trading within a falling wedge pattern during the past 8 months.
This is marked in the daily chart in pink color.
Once the stock moves up and breaks out from a bullish pattern like Falling Wedge Pattern, it has the potential to move further up.
#2 Double Bottom Breakout Support: The stock had broken out of a double bottom pattern as marked in the daily chart.
The stock has since corrected and is currently near the breakout level of the pattern. The double bottom breakout level (marked as the orange dotted line) typically acts as a support for the stock and is a good point for a potential bounce back.
#3 Bullish Candlestick: The latest candlestick is a hammer, which is a bullish candlestick, indicating a possible reversal from these levels.
#4 Uptrend Unbroken: As you can see from the daily chart, the uptrend is still unbroken for the stock. This is because the stock has been forming higher highs and higher lows. The stock is currently trading near this trendline support as well.
#5 Weekly Double Bottom Breakout: The weekly chart shows that the stock had broken out of a double bottom pattern and has corrected to reach near the breakout level. This weekly double bottom breakout level is also a good support level for the stock.
#6 Upcoming MACD crossover: In the weekly chart, the MACD line is about to cross above the MACD signal line. This is also a possible bullish sign.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, you can purchase the stock between $18.00 and $19.38.
Note: You can purchase half the intended quantity of shares at the current price of $19.38 and the remaining quantity if the stock corrects to falling wedge pattern’s lower level of $18.
TP: Our first target price is $25 in 4 months and the second target price is $30 in 6 months based on the falling wedge pattern.
SL: To limit risk, place a stop loss below $17.40. Note that this stop loss is on a closing basis.
Our target potential upside is almost 30% to 67% in the next 4-6 months.
- When entering at $18, our target potential upside is almost 39% to 67%. For a risk of $0.60, our first target reward is $7 and the second target reward is $18. In other words, this trade offers nearly 12x to 20x more potential upside than downside.
- When entering at $19.38, our target potential upside is almost 30% to 55%. For a risk of $1.98, our first target reward is $5.62 and the second target reward is $10.62. In other words, this trade offers nearly 3x to 5x more potential upside than downside.
Overall, this trade offers nearly 3x to 20x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the falling wedge pattern. 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.
Tara[hana-code-insert name=’MMPress’ /]