The well-known bank headquartered in Boston, Massachusetts, Berkshire Hills Bancorp, Inc. (NYSE: BHLB) seems to be ready for a price surge according to its latest charts.
Bullish Indications
#1 Descending Triangle Pattern Breakout: The stock’s daily chart shows that it has recently broken out of a descending triangle pattern in an upward direction. This descending triangle pattern is marked in pink color on the daily chart. An upward breakout from a bearish pattern like descending Triangle is typically a good bullish sign.
Daily Chart – BHLB
#2 MACD above Signal Line: As you can see from the daily chart, the MACD line (blue color) is currently above the MACD signal line (orange color). This indicates a possible bullish bias.
[hana-code-insert name=’adsense-article’ /]#3 Price above MA: The stock is currently trading above its 50-day SMA.
This shows that the bulls are currently in control.
#4 Bullish Aroon: The value of Aroon Up (orange line) is above 70, while Aroon Down (blue line) is below 30.
This indicates possible bullishness.
#5 Bullish Stochastic: The stochastic shows that the %K line is above the %D line.
This indicates an overall bullishness.
#6 Double Bottom Pattern: From the daily chart, we can see that the stock is currently forming a double bottom pattern. This pattern is marked in orange color in the chart. A double bottom pattern is a strong bullish pattern. A breakout from the pattern usually foretells the possibility of an upmove in the short term.
#7 %K above %D: The stochastics reveal that the %K line is currently above the %D line in the weekly chart as well. This is a possible bullish sign.
Weekly Chart – BHLB
#8 Bullish RSI: In the weekly chart, the RSI is moving up from oversold levels. This is a possible bullish sign.
#9 Near Support Levels: The weekly chart shows that the stock is moving up after taking support near a long-term support level. This level is marked as a pink dotted line. This seems like a good area for the stock to bounce upwards.
#10 Bullish MACD: The MACD line (blue color) is currently above the MACD signal line (orange color) in weekly chart as well. This indicates a possible bullish bias.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, the ideal buy level for BHLB is above the resistance level of $32.
TP: Our target prices are $37 and $44 in the next 3-6 months.
SL: To limit risk, place a stop loss at $29.60. Note that the stop loss is on a closing basis.
Our target potential upside is almost 15% to 38% in the next 3-6 months. For a risk of $2.40, our target rewards are $5.00 and $12.00. This is a 1:2 and 1:5 risk-reward trade.
In other words, this trade offers nearly 2x to 5x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the breakout level of the descending 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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