The financial services holding company headquartered in St. Louis, Missouri, Stifel Financial Corp (NYSE: SF) seems to be gearing up for a surge as per its latest charts.
#1 Channel: As you can see from the daily chart, the stock has been trading within a channel during the past few months. This is marked in the daily chart in blue color. Currently, the stock is near the upper end of the channel. A breakout from the channel could cause the stock to move higher.
#2 Oversold CCI Moving Up: The CCI was below -200 and is currently moving up, indicating possible bullishness.[hana-code-insert name=’adsense-article’ /] #3 Double Bottom: A double bottom pattern is being currently formed for SF.
This is shown in the figure in orange color.
A double bottom pattern is a bullish reversal pattern, indicating that the stock could possibly move upwards shortly.
#4 Oversold RSI: The RSI is currently near oversold levels, as seen in the daily chart.
#5 Hammer: As you can see from the daily chart, the latest candle formed on the chart is a Hammer.
This pattern is considered as a sign of a reversal of the downward trend. A hammer usually shows that although the price went down during the day, the buyers were able to bring back the price up by the end of the day.
#6 Trendline Support: The stock is currently near the support level of the uptrend line. The trend line is shown in purple color on the weekly chart below. This is a possible bullish sign as the stock could bounce back from this level.
#7 CCI moving up: The CCI is currently up from oversold levels, indicating a bullish bias.
#8 Oversold RSI: The RSI is currently near oversold levels. This indicates that the price may move higher soon.
#9 UO moving up from Oversold levels: When the value of UO is near 30, it is called as oversold. This means that either the stock price may increase soon. Currently, the UO is moving up after reaching near oversold levels. This is a bullish sign.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can buy the shares of SF at the current price of $52.12.
TP: Our target prices are $62 and $75 in the next 3-6 months.
SL: To limit risk, place a stop loss below $49.50. Note that this stop loss is on a closing basis.
Our target potential upside is nearly 19% to 44% in the next 3-6 months. For a risk of $2.62, the target rewards are $9.88 and $22.88. This is a nearly 1:4 and 1:9 risk-reward trade.
In other words, this trade offers nearly 4X to 9X more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the downtrend channel. 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.
Tara[hana-code-insert name=’MMPress 2′ /]