The corporation whose primary business is the ownership and management of NASCAR and IndyCar race tracks, International Speedway Corp Class A (NASDAQ: ISCA) seems to be ready for a price surge as per its latest charts.
#1 Ascending triangle pattern Breakout: ISCA’s daily chart shows that the stock has been recently forming an Ascending Triangle pattern. An Ascending Triangle pattern is a bullish pattern. This is marked on the daily chart in purple color. A breakout from an ascending triangle pattern generally indicates the start of a bullish trend. The breakout level also acts a good support level. Currently, the stock has broken out of the ascending triangle pattern with a high volume, which is usually a bullish sign.
#2 Trading Above MAs: The stock is currently trading above its 50-day as well as 200-day SMA, which implies that the bulls are currently in control.
This indicates possible bullishness.
#4 MACD above Signal Line: The MACD (light blue color) is currently above the MACD signal line (orange color) in the daily chart.
This typically indicates a bullish setup.
#5 Bullish Stoch: The %K line is above the %D line of the stochastic in the daily chart, indicating possible bullishness.
#6 IH&S Breakout: As you can see from the weekly chart of ISCA, the stock has currently broken out of an Inverted Head and Shoulders (IH&S) pattern.
This IH&S pattern is marked in the chart in pink color. An IH&S pattern is a strong bullish pattern. A breakout from this pattern usually indicates that the stock may move higher in the short term.
#7 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart as well, indicating possible bullishness.
#8 MACD above Signal Line: In the weekly chart as well, the MACD line is above the MACD signal line which is a bullish signal.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for ISCA is above the resistance level of $47. For those with higher risk appetite, you can purchase one-fourth the intended quantity of stocks at the current price of $45.55 with the same stop-loss.
TP: Our target prices are $52 and $60 based on the breakout from the Ascending Triangle pattern.
SL: To limit risk, place a stop loss near $43.90. Note that this stop loss is on a closing basis.
Our target potential upside is 11% to 28% in the next 4-6 months. For a risk of $3.10, the target rewards are $5.00 and $13.00. This is a nearly 1:2 and 1:4 risk-reward trade.
In other words, this trade offers nearly 2x to 4x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the ascending 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 its sector.