The well-known provider of wireless and wireline telecommunications services in North America, Bermuda, and the Caribbean, ATN International Inc. (NASDAQ: ATNI) seems to be gearing up for a surge after a slight pullback as per its latest charts.
Bullish Indications
#1 MA crossover: As you can see from the daily chart of ATNI below, the short-term moving average of 50-day SMA has crossed above the longer-term moving average of 200-day SMA. Such crossovers indicate a possible upcoming bullish movement. The stock is also currently trading above both its 50-day and 200-day SMA, which implies that the bulls are currently in control.
Daily Chart – ATNI
#2 IH&S Pattern Breakout: From the daily chart of ATNI, you can see that the stock had recently broken out of an Inverted Head and Shoulders (IH&S) pattern. This is marked in the chart below in orange color. This is a possible sign of an upcoming bullish move.
[hana-code-insert name=’adsense-article’ /]#3 Ascending triangle pattern Breakout: ATNI’s daily chart shows that the stock had broken out of an Ascending Triangle pattern.
An Ascending Triangle pattern is a bullish pattern.
This is marked on the daily chart in blue color. The base of the triangle also generally acts a good support level.
#4 MACD Above Signal Line: In the daily chart, the MACD line (light blue color) has crossed above the MACD signal line (orange color) which is typically considered as a potential buy signal.
#5 Overbought RSI: In the daily chart, the RSI is above 70, indicating that it is nearing overbought levels. This implies that a there may a slight correction before the next upmove.
#6 Downtrend Broken: The weekly chart shows that the stock was in a downtrend during the past year. Currently, the stock has broken out of the downtrend and have started a new uptrend. This is a bullish sign.
Weekly Chart – ATNI
#7 MACD Above Signal Line: In the weekly chart as well, the MACD line has crossed above the MACD signal line which is a bullish signal.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level of ATNI is when it pulls back and reaches around $62.50.
But if you want a speedier entry, you can buy half the intended quantity of shares now at the current price of $66.22 and the rest if the stock pulls back to $62.50.
TP: Our target prices are $75 and $85 based on the breakout from Ascending Triangle pattern.
SL: To limit risk, place a stop loss near $56.50. Note that this stop loss is on a closing basis.
Our target potential upside is 20% to 36% in the next 4-6 months.
- When entering at $62.50: For a risk of $6.00, the target rewards are $12.50 and $22.50. This is a nearly 1:2 and 1:4 risk-reward trade.
- When entering at $66.22: For a risk of $9.72, the target reward (TP#2) is $18.78. This is a nearly 1:2 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 with high volume from the ascending triangle breakout level. 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 its sector.
Happy Trading!
Tara
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