The American computer software company based in Irvine, California, whose products are used for data science and analytics, Alteryx Inc. (NYSE: AYX) seems to be ready for an upmove according to its latest charts.
Bullish Indications
#1 Double Bottom Breakout: As you can see from the daily chart of AYX below, the stock had recently broken out of a double bottom pattern. This pattern is marked in pink color. A double bottom pattern is a bullish reversal pattern, indicating that the stock could possibly move upwards.
Daily Chart – AYX
#2 Moving up from Support Area: The stock’s daily chart shows that the stock has moved up after taking support near a strong support area. This area is marked as an orange dotted line. A bounce back from a support area is usually a possible bullish sign.
[hana-code-insert name=’adsense-article’ /]#3 Bullish Stoch: The %K line is above the %D line of the stochastic, indicating possible bullishness.
#4 MACD above Signal Line: In the daily chart, the MACD line (light blue color) is currently above the MACD signal line (orange color) which is typically considered as a potential buy signal.
#5 Downtrend Broken: The daily chart shows that the stock has broken out of the short-term downtrend.
This downtrend line has been marked in purple color in the chart.
This indicates that the bulls are getting stronger.
#6 Bullish RSI: The RSI is currently above 50 and moving up, indicating possible bullishness.
#7 Fibonacci Support: Usually, after an up-move, stocks retraces to any of the key Fibonacci levels before surging back again. AYX had taken support at the 61.8% Fibonacci support level before starting to move higher, as seen in the weekly chart. This seems like a good area for the stock to bounce upwards.
Weekly Chart – AYX
#7 %K above %D: The %K line of the stochastic is currently above the %D line, indicating bullishness.
#8 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), implying possible bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase shares of AYX if it trades above yesterday’s close. This translates to a price above $104.25.
TP: Our target prices are $112 and $120 in the next 3-6 months.
SL: To limit risk, place a stop loss at $99.10. Note that this stop loss is on a closing basis.
Our target potential upside is nearly 7% to 15% in the next 6 months.
For a risk of $5.15, our target rewards are $7.75 and $15.75. 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 with high volume from the double bottom 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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