The Ohio-based company that provides professional business services, products and solutions that help its clients to manage their finances and employees, CBIZ, Inc. (NYSE: CBZ) shows signs of an upcoming price surge according to its latest charts.
Bullish Indications
#1 Symmetrical Triangle Pattern Breakout: As seen in the daily chart, the stock had recently formed a symmetrical triangle pattern. This pattern is shown as blue lines. It represents a period of consolidation before the price breaks out and is typically formed when there is an indecision in the price movements and uncertainty among the buyers and sellers. Once a breakout from the upper line occurs, it usually signifies the start of a new bullish trend. Currently, the stock has broken out of the symmetrical triangle pattern, indicating bullishness.
Daily Chart – CBZ
#2 MACD above Signal Line: As you can see from the daily chart, the MACD line (blue color) is currently above the signal line (orange color), indicating a bullish bias.
[hana-code-insert name=’adsense-article’ /]#3 Above MAs: The stock is currently trading above both 50-day and 200-day SMA, indicating that the bulls are currently in control.
#4 Bullish ADX: The ADX line is starting to move up from below –DI and +DI lines.
The +DI line is also currently above –DI line.
All these indicate possible bullishness.
#5 Fibonacci Level Support: Usually, after an up-move, stocks retraces to any of the key Fibonacci levels before surging back again.
CBZ had taken support at the 68.1% Fibonacci support level of the upmove, as seen from the weekly chart.
This seems like a good level to bounce back upwards. The price is also above the 50-week and 200-week SMA, indicating that the bulls are now in control.
Weekly Chart – CBZ
#6 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30 in the weekly chart. This indicates bullishness.
#7 Strong Stoch: The stochastic is currently moving up and the %K line is currently above the %D line in the weekly chart. This usually indicates bullishness.
#8 Bullish MACD: The MACD line is above the signal line in the weekly chart as well, indicating a possible bullish bias.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, you can purchase the shares of CBZ if it closes above the high of Friday’s candle. This translates to a price of around $21.70.
TP: Our target prices are $25 and $30 in the next 4-6 months.
SL: To limit risk, place a stop loss at $19.80. Note that this stop loss is on a closing basis.
Our target potential upside is almost 15% to 38% in the next 4-6 months.
For a risk of $1.90, our target rewards are $3.30 and $8.30. This is an almost 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 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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