The biopharmaceutical company that focuses on the discovery and development of antibody-based therapeutics for the treatment of cancer, MacroGenics Inc. (NASDAQ: MGNX) shows signs of an upcoming price surge according to its latest charts.
Bullish Indications
#1 Falling Wedge Breakout: The daily chart of MGNX shows that the stock had recently broken out of a falling wedge pattern. This is marked in the daily chart in purple color. A breakout from a bullish pattern like Falling Wedge Pattern shows that the stock has gained momentum and has the potential to move further up.
Daily Chart – MGNX
#2 Bullish RSI: The RSI is above 50 and moving up, indicating the strength of the current upmove.
[hana-code-insert name=’adsense-article’ /] #3 Trading Above MA: The stock is currently trading above its 50-day moving average as well as 200-day SMA, indicating a bullish bias.#4 Bullish Stochastic: The %K line is above the %D line of the stochastic, indicating bullishness.
#5 MACD above Signal Line: In the daily chart, the MACD (light blue color) is currently above the MACD signal line (orange color).
This indicates a possible bullish setup.
#6 Cup and Handle pattern: The weekly chart of MGNX shows that the stock has formed a cup and handle pattern.
This is marked in the chart in pink color. A cup and handle pattern is a consolidation and breakout pattern. A breakout from this pattern indicates that the stock may move higher. Typically, stocks retrace to the breakout level again before continuing the upmove.
Weekly Chart – MGNX
#7 Strong RSI: The RSI is above 50 and moving up. This is a bullish sign.
#8 %K above %D: In the weekly chart as well, the %K line of the stochastic is currently above the %D line, indicating bullishness.
#9 Strong CCI: The CCI is currently above zero and moving upwards from oversold levels in the weekly chart. This is a bullish sign.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, you can purchase shares of MGNX at the current price of $23.10.
TP: Our target prices are $32 and $46 in the next 4 to 6 months.
SL: To limit risk, place a stop loss below $20.30. Note that this stop loss is on a closing basis.
Our target potential upside is almost 39% to 99% in the next 4-6 months. For a risk of $2.80, our first target reward is $8.90 and the second target reward is $22.90. This is a nearly 1:3 and 1:8 risk-reward trade.
In other words, this trade offers nearly 3x to 8X 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 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 the sector.
Happy Trading!
Tara
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