The company that designs, develops, manufactures, and markets therapeutic ultrasonic medical devices, Misonix Inc. (NASDAQ: MSON) seems to be poised for a price surge as per its latest charts.
Bullish Indications
#1 Downtrend Channel Breakout: As you can see from the daily chart, the stock has been trading within a downtrend channel during the past few months. This is marked in the daily chart in purple color. Currently, the stock has broken out of the downtrend channel. Once the stock breaks out from a downtrend channel, it has the potential to move further up.
Daily Chart – MSON
#2 Price above MAs: The price is currently above the short-term moving average of 50-day SMA as well as the longer-term moving average of 200-day SMA. This is a possible bullish sign.
[hana-code-insert name=’adsense-article’ /]#3 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.
#4 MACD above Signal Line: The daily chart shows that the MACD (light blue color) is currently above the MACD signal line (orange color).
This typically indicates a bullish setup.
#5 Bullish ADX and DI: The ADX indicator shows bullishness because (+DI) is greater than (-DI), ADX and (+DI) are above (-DI), and ADX has moved up from below both (+DI) and (-DI).
#6 Above Support Area: As you can see from the daily chart, the stock has currently moved up from a resistance-turned-support level. This level is marked as an orange dotted line. This looks like a good area for the stock to move higher.
#7 Fibonacci Support: Usually, after an up-move, stocks typically retrace to any of the key Fibonacci levels before surging back again. MSON had taken support at the 61.8% Fibonacci support level as seen in the daily chart. So, this seems like a strong support area for the stock.
Weekly Chart – MSON
#8 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart, indicating possible bullishness.
#9 Bullish RSI: The RSI is currently nearing 50 and moving up, indicating possible bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase the shares of MSON if it trades above Friday’s close. This translates to a price above $21.45.
TP: Our target prices are $26 and $30 in the next 4-6 months.
SL: To limit risk, place stop-loss at $18.40. Note that the stop-loss is on a closing basis.
Our target potential upside is 21% to 40% in the next 4 to 6 months.
For a risk of $3.05, our target rewards are $4.55 and $8.55. 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 from the downtrend channel breakout level with a high volume. 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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