The company that operates as a non-diversified, closed-end management investment company in the United States, Altaba Inc. (NASDAQ: AABA) shows signs of an upcoming price surge according to its latest charts.
#1 Channel Breakout: The daily chart of AABA shows that the stock has been trading within a channel for the past few months. This channel is marked in the daily chart in pink color. Currently, the stock has broken out of this channel, indicating that it has the potential to surge ahead.
#2 Double Bottom Breakout: In the daily chart of AABA, we can see that the stock had recently broken out of a double bottom pattern. This pattern is marked in the chart in orange color. The stock is currently consolidating near the breakout level of the pattern. A double bottom pattern is a strong bullish pattern and indicates that the stock may move higher in the short term.
[hana-code-insert name=’adsense-article’ /]#3 Above MAs: The stock is currently trading above both 50-day and 200-day SMA, indicating the overall bullishness of the stock.
#4 Strong RSI: The RSI is above 50, indicating strength.
#5 Bullish Engulfing: The latest candlestick pattern is a bullish engulfing pattern which is a bullish reversal candle.
This implies that the stock may move higher soon.
#6 MACD above Signal Line: As you can see from the weekly chart, the MACD line (blue color) is currently above the signal line (orange color). This indicates a possible bullish bias.
#7 Fibonacci Support: The weekly chart shows that the stock was on an uptrend after which it has been correcting. It is now near the 50% Fibonacci retracement level of this move. Usually, after an up-move, stocks retrace to any of the key Fibonacci levels before resuming its upmove. So, this 50% retracement level seems like a good support area.
#8 Broken Downtrend: The weekly chart shows that the stock has currently broken out of a short-term downtrend. This downtrend is marked as pink color line. This is also a possible bullish sign.
#9 Bullish RSI: The RSI is above 50 and moving up, indicating possible bullishness.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, you can purchase the shares of AABA at the current price of $69.11.
TP: Our target prices are $75 and $82 in the next 3-6 months.
SL: To limit risk, place a stop loss at $66.10. Note that this stop loss is on a closing basis.
Our target potential upside is almost 9% to 19% in the next 3-6 months. For a risk of $3.01, our target rewards are $5.89 and $12.89. This is almost 1:2 and 1:4 risk-reward trade.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the 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 the sector.
Tara[hana-code-insert name=’IAlley article’ /]