The Massachusetts-based global provider of blood and plasma supplies and services, Haemonetics Corporation (NYSE: HAE) seems to be getting ready for a price bump in the short-term as per the latest charts.
Bullish Move – Chart Indications
#1 Flag Pattern Breakout: As you can see from the daily chart of HAE, the stock was in a strong uptrend after which it started consolidating and was in a narrow range. This is a classic flag pattern and is marked in the chart in purple color. A flag is a continuation pattern. Whenever a stock breaks out of the flag pattern, it typically continues its previous trend (uptrend in this case). Currently, the stock has broken out of the flag pattern which is a possible bullish sign.
Daily Chart – HAE
#2 Price above MAs: The stock is currently above the 50-day as well as 200-day SMA, indicating that the bulls have currently gained control.
#3 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).
#4 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.
#5 Bullish Stoch: The %K line is above the %D line of the stochastic in the daily chart, indicating possible bullishness.
#6 Unbroken Uptrend: The weekly chart shows that the stock’s uptrend is unbroken, as it has been forming higher highs and higher lows for the past several months. This is a possible bullish sign.
Weekly Chart – HAE
#7 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart as well, indicating possible bullishness.
#8 Bullish RSI: In the weekly chart, RSI is moving up from oversold levels and is currently above 50. This is also a possible bullish sign.
#9 Bullish ADX: The ADX indicator shows bullishness, as (+DI) is greater than (-DI), and ADX has started rising from below both (+DI) and (-DI).
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase shares of HAE at the price of $121.90.
TP: Our target prices are $130 and $140 in the next 3 to 6 months.
SL: To limit risk, place a stop loss at $116.50. Note that the stop loss is on a closing basis.
Our target potential upside is 7% to 24% in the next 3-6 months.
For a risk of $5.40, our first target reward is $8.10 and the second target reward is $18.10. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers 2x to 3x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the flag pattern with 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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