The Las Vegas, Nevada-based global company focused on creating a diverse mix of entertaining gaming experiences for every kind of player, Playags Inc. (NYSE: AGS) seems to be poised for a price surge according to its charts.
Bullish Indications
#1 Symmetrical Triangle Pattern breakout: The daily charts shows that a symmetrical triangle pattern has been formed for the stock. This is marked in purple color lines. A symmetrical triangle pattern represents a period of consolidation before the price breaks out. This is typically formed when there is indecision in the price movements and uncertainty among the buyers and sellers. Once a breakout from the upper trend line occurs, it usually signifies the start of a new bullish trend. Currently, the stock has broken out of the symmetrical triangle pattern. This is a possible bullish sign.
Daily Chart – AGS
#2 Price above MAs: The daily chart shows that the stock is currently above both 50-day and 200-day SMA. This is a possible bullish sign.
[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 bullish.
#4 %K above %D: The %K line of the stochastic is currently above the %D line, indicating possible bullishness.
#5 Double Bottom Breakout Support: The weekly chart shows that the stock had broken out of a double bottom pattern.
This pattern is shown in purple color.
Currently, the stock has started to move up after taking support near the breakout level of the double bottom pattern (marked as an orange dotted line). This is a possible bullish sign.
Weekly Chart – AGS
#6 Bullish RSI: The RSI is currently above 50 and moving up indicating possible bullishness.
#7 Bullish Stochastic: The %K line is above the %D line in the weekly chart as well. This indicates that the stock may move higher soon.
#8 Other bullish Indications: In the weekly chart, the MACD and CCI indicators are bullish. The price is also above its 50-week SMA. All these points to the possibility of an upmove.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, you can buy the shares of AGS at the current price of $26.97.
TP: Our target prices are $32 and $36 in the next 4-6 months.
SL: To limit risk, place a stop loss at $23.90. Note that this stop loss is on a closing basis.
Our target potential upside is almost 19% to 33% in the next 4-6 months. For a risk of $3.07, our target rewards are $5.03 and $9.03. This is an almost 1:2 and 1:3 risk-reward trade.
In other words, this trade offers nearly 2x to 3x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the symmetrical triangle pattern. 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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