The global supplier and leading manufacturer of quality engineered materials, P H Glatfelter Co (NYSE: GLT) seem to be gearing up for a surge as per its latest charts.
Bullish Indications
#1 Symmetrical Triangle Pattern Breakout: The daily chart shows that the stock has broken out of a Symmetrical Triangle pattern. This pattern is a continuation pattern and is characterized by two converging trend lines connecting a series of sequential peaks and troughs. This is marked on the daily chart as purple lines. A breakout from a symmetrical triangle pattern usually signifies the start of a bullish move.
Daily Chart – GLT
#2 Price above MAs: The price is currently above both the short-term moving average of 50-day SMA and the longer-term moving average of 200-day SMA. This usually implies a possible bullish bias for the stock.
[hana-code-insert name=’adsense-article’ /]#3 MACD above Signal Line: In the daily chart, the MACD (light blue color) is currently above the MACD signal line (orange color).
This indicates a possible bullish setup.
#4 Bullish ADX and DI: The ADX indicator shows bullishness because (+DI) is greater than (-DI) and ADX has started rising from below both (+DI) and (-DI).
#5 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.
#6 Double Bottom Pattern: The daily chart shows that the stock has been forming a double bottom pattern.
This is marked in pink color. A double bottom pattern is a bullish reversal pattern and a breakout from it indicates that the stock could move upwards. Currently, the stock has broken out of the double bottom pattern, indicating possible bullishness.
#7 Fibonacci Support: Usually, after an up-move, stocks retraces to any of the key Fibonacci levels before surging back again. GLT has taken support at the 23.6% Fibonacci support level of the upmove, as seen in the weekly chart. This is a possible bullish sign.
Weekly Chart – GLT
#8 Bullish RSI: The RSI is currently above 50 and moving up in the weekly chart, indicating possible bullishness.
#9 Bullish Stochastic: The %K (blue) line of stochastic is currently above the %D (Orange) line in the weekly chart. This is a possible bullish indication.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase the shares of GLT at the current price of $17.35.
TP: Our target prices are $25 and $30 in the next 3-5 months.
SL: To limit risk, place a stop loss at $13.50. Note that this stop loss is on a closing basis.
Our target potential upside is nearly 44% to 73% in the next 3-6 months.
For a risk of $3.85, the target rewards are $7.65 and $12.65. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers nearly 2x to 3x 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 its sector.
Happy Trading
Tara
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