The American public research, development and manufacturing company established in 1999 as a spin-off from Hewlett-Packard, Agilent Technologies Inc. (NYSE: A) seems to be getting ready for a price bump as per the latest charts.
Bullish Move – Chart Indications
#1 Double Bottom: As seen from the daily chart, the stock had recently broken out of a double bottom pattern (marked in orange color). Once the stock breaks out of a bullish pattern like the double bottom pattern, it typically moves higher.
Daily Chart – A
#2 Price above MAs: The stock is currently trading above its 50-day as well as 200-day SMA, indicating that the bulls are still in control.
[hana-code-insert name=’adsense-article’ /]#3 RSI moving up: The RSI is currently moving up above 50 from oversold levels. This indicates bullishness.#4 Hammer: The latest candle is a hammer, which is a bullish reversal candle.
A hammer typically indicates that the bulls are strengthening and that the stock is possibly attempting to determine a bottom.
#5 MACD Above Signal Line: The MACD line is currently above the signal line in the daily chart. This is a bullish sign as well.
#6 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30 in the daily chart. This indicates bullishness.
#7 Flag Pattern Breakout: As you can see from the weekly chart of A, the stock was in a strong uptrend from the end of September 2015 to end of January 2018. Then the stock started consolidating and was in a narrow range. This is a classic flag pattern and is marked in the chart below in pink color. Currently, the stock has broken out of the flag. A Flag is a continuation pattern. Whenever a stock breaks out of the flag pattern, it typically continues its previous trend (uptrend in this case). However, a retest of the flag pattern’s breakout level usually happens before resuming the trend.
Weekly Chart – A
#8 Strong Stoch: The stochastic is currently moving up and the %K line is currently above the %D line. These are bullish signs.
#9 Bullish RSI: The RSI is above 50 and moving up, indicating bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase the shares of Agilent Technologies at the current price of $70.59.
TP: Our target prices are $80 and $85 in the next 4-6 months.
SL: To limit risk, place a stop loss below $68.10. Note that the stop loss is on a closing basis.
Our target potential upside is 13% to 20% in the next 4-6 months. For a risk of $2.49, our target rewards are $9.41 and $14.41. This is a nearly 1:4 and 1:6 risk-reward trade.
In other words, this trade offers 4x to 6x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the double bottom 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 sector.
Happy Trading!
Tara
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