The New Jersey-based surgical and medical instrument manufacturing company, Integra Lifesciences Holdings Corp (NASDAQ: IART) seems to be gearing up for a surge as per its latest charts.
Bullish Indications
#1 Ascending triangle pattern Breakout: IART’s daily chart shows that the stock had broken out of an Ascending Triangle pattern. An Ascending Triangle pattern is a bullish pattern. This is marked on the daily chart in pink color. The base of the triangle also generally acts a good support level.
Daily Chart – IART
#2 Price above MAs: The price is currently above the short-term moving average of 50-day SMA and the longer-term moving average of 200-day SMA.
[hana-code-insert name=’adsense-article’ /]This implies that the bulls are still in control.#3 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), indicating a bullish bias.
#4 Bullish ADX and DI: The ADX indicator shows bullishness because (+DI) is greater than (-DI), ADX and (+DI) are above (-DI), and ADX has started rising from below both (+DI) and (-DI).
#5 Unbroken Uptrend: The weekly chart shows that the stock’s uptrend is unbroken, as it has been forming higher highs and higher lows since the past several months.
This uptrend line is marked in pink color in the weekly chart below.
Weekly Chart – IART
#6 MACD above signal line: In the weekly chart as well, the MACD line (blue color) is currently above the signal line (orange color), indicating a bullish bias.
#7 Bullish ADX and DI: The ADX indicator shows bullishness in the weekly chart as well because (+DI) is greater than (-DI), ADX and (+DI) lines are above (-DI), and ADX has started rising from below both (+DI) and (-DI) and has currently crossed above (-DI).
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level of IART is if it crosses above the resistance level of around $67. But for those with a higher risk appetite, you can purchase half the intended quantity of shares of IART at the current price of $64.59.
TP: Our target prices are $75 and $80 in the next 3-6 months.
SL: To limit risk, place a stop loss below $62.30. Note that this stop loss is on a closing basis.
Our target potential upside is nearly 12% to 24% in the next 3 to 6 months.
- Entry at $64.59: For a risk of $2.29, the target rewards are $10.41 and $15.41. This is a nearly 1:5 and 1:7 risk-reward trade.
- Entry at $67: For a risk of $4.70, the target rewards are $8.00 and $13.00. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers nearly 2x to 7x 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 breakout level. 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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