The real estate investment trust with its headquarters in New York City that invests in shopping centers, Brixmor Property Group Inc. (NYSE: BRX) seems to be getting ready for a price bump as per the latest charts.
Bullish Move – Chart Indications
#1 Falling Wedge Breakout: As you can see from the daily chart of BRX, the stock has been forming a falling wedge pattern for the past few months. This is marked as orange color lines. The stock has currently broken out of the falling wedge pattern after taking support at the bottom of the wedge. A falling wedge is a bullish pattern and a breakout from it implies that the stock may move higher in the short term.
Daily Chart – BRX
#2 RSI Strong: Relative strength index (RSI) is currently above 50. This indicates the strength of the current upmove.
[hana-code-insert name=’adsense-article’ /]#3 MACD above Signal Line: In the daily chart, the MACD line (light blue color) is currently above the MACD signal line (orange color) which is typically considered as a potential buy signal.#4 Bullish Stoch: The %K line is above the %D line of the stochastic and it has moved from oversold, indicating possible bullishness.
#5 Above MAs: The stock is currently trading above both 50-day as well as 200-day SMA.
The stock is also near the trend-line support. This means that the bulls are currently in control.
#6 Double Bottom Breakout: In the daily chart, we can see that the stock has broken out of a double bottom pattern. This pattern is shown in the figure in pink color. A double bottom pattern is a bullish reversal pattern, indicating that the stock could possibly move upwards shortly.
#7 Downtrend Broken: The weekly chart shows that the stock has broken out from the short-term downtrend. This downtrend line is marked in orange color. This breakout from downtrend indicates that the stock may reverse its trend soon.
Weekly Chart – BRX
#8 Bullish RSI: The Relative strength index (RSI) is moving up from oversold levels and is now above 50 in the weekly chart. This shows the strength of the current upmove.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for BRX is if it corrects to around $16 or if it closes above $16.60.
TP: Our target prices are $20 and $25 in the next 4-6 months.
SL: To limit risk, place a stop loss below $15.20 (entry at $16) and $16.20 (entry at $16.60). Note that the stop loss is on a closing basis.
Our target potential upside is 20% to 56% in the next 4-6 months.
- Entry at $16: For a risk of $0.80, our first target reward is $4.00 and the second target reward is $9.00. This is a nearly 1:5 and 1:11 risk-reward trade.
- Entry at $16.60: For a risk of $0.40, our first target reward is $3.40 and the second target reward is $8.40. This is a nearly 1:9 and 1:21 risk-reward trade.
In other words, this trade offers 5x to 21x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the falling wedge pattern with high volume. 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 energy sector.
Happy Trading!
Tara
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