The biomedicine firm engaged in the development of new treatments for degenerative and cancerous diseases, Cellular Biomedicine Group Inc. (NASDAQ: CBMG) shows signs of an upcoming price surge according to its latest charts.
Bullish Indications
#1 Uptrend Channel Breakout: The daily chart of CBMG shows that the stock has been trading within an uptrend channel for the past few months. This channel is marked in the daily chart in purple color. Currently, the stock has broken out of this channel. This shows that the stock has gained momentum and has the potential to move up.
Daily Chart – CBMG
#2 Above MAs: The stock is currently trading above both 50-day and 200-day SMA, indicating the overall bullishness of the stock.
[hana-code-insert name=’adsense-article’ /] #3 Strong RSI: RSI is above 50 and moving up, indicating strength.#4 MACD above Signal Line: As you can see from the daily chart, the MACD line (blue color) is currently above the signal line (orange color), indicating a bullish bias.
#5 Bullish Stoch: The %K line is above the %D line of the stochastic, indicating possible bullishness.
#6 Flag Pattern Breakout: As seen from the weekly chart, the stock was in an uptrend after which it started consolidating.
This is a classic flag pattern, which is a continuation pattern. The flag pattern is marked in orange color in the weekly chart. Whenever a stock breaks out of the flag pattern, it typically continues its previous trend which is an uptrend in this case. The stock has currently broken out of the flag pattern, which is a bullish sign.
Weekly Chart – CBMG
#7 MACD above Signal Line: In the weekly chart as well, the MACD line (blue color) is currently above the signal line (orange color), indicating a bullish bias.
#8 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30 in the weekly chart. This indicates bullishness.
#9 %K above %D: The stochastics show that the %K line is currently above the %D line 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 CBMG at the current price of $23.65.
TP: Our target prices are $30 and $40.
SL: To limit risk, place a stop loss at $19.50. Note that this stop loss is on a closing basis.
Our target potential upside is almost 27% to 68% in the next 4-6 months.
For a risk of $4.15, our target rewards are $6.35 and $16.35. This is almost 1:2 and 1:4 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 channel 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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