The American gaming hotel and casino corporation founded and based in Nevada that owns and operates over 50 properties and seven golf courses under several brands, Caesars Entertainment Corporation Common Stock (NASDAQ: CZR) seems to be ready for a surge as per its latest charts.
Bullish Indications
#1 Ascending Triangle Pattern Breakout: CZR’s daily chart shows that the stock had recently formed an Ascending Triangle pattern. An Ascending Triangle pattern is a bullish pattern and is marked on the daily chart in pink color. Currently, the stock has broken out of the ascending triangle pattern, indicating possible bullishness.
Daily Chart – CZR
#2 Trading Above MAs: The stock is currently trading above both its short-term moving average of 50-day and the long-term moving average of 200-day SMA, which implies that the bulls are currently in control. 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).
This is typically considered as a bullish signal.
#4 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 possible bullishness.
#5 Runaway Gap: There is a runaway gap on the daily chart.
This usually foretells a significant change in price in the direction of the current uptrend.
#5 Downtrend Broken: The weekly chart shows that the stock has currently broken out of a short-term downtrend. It has now started a new uptrend, as it has been recently forming higher highs and higher lows. The downtrend line is marked in blue color in the weekly chart below. This is a possible bullish sign.
Weekly Chart – CZR
#6 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart, indicating possible bullishness.
#7 MACD Above Signal Line: In the weekly chart as well, the MACD line (light blue color) is currently above the MACD signal line (orange color). This is also a possible bullish sign.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for CZR is in two scenarios.
- If the stock corrects to the support level of the runaway gap at around $9.90.
- If the stock closes above the resistance level of $11.80.
TP: Our target prices are $14 and $18 based on the breakout from the Ascending Triangle pattern.
SL: To limit risk, place a stop loss near $10.40 (for entry near $11.80) and $8.60 (for entry near $9.90). Note that this stop loss is on a closing basis.
Our target potential upside is 19% to 82% in the next 3-5 months.
- Entry at $9.90: For a risk of $1.30, the target rewards are $4.10 and $8.10. This is a nearly 1:3 and 1:6 risk-reward trade.
- Entry at $11.80: For a risk of $1.40, the target rewards are $2.20 and $6.20. This is a nearly 1:2 and 1:4 risk-reward trade.
In other words, this trade offers nearly 2x to 6x 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.
Happy Trading!
Tara
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