The genetic medicines company that focuses on translating proprietary gene editing and gene therapy technologies into novel treatments for patients with rare diseases, Homology Medicines Inc. (NASDAQ: FIXX) shows signs of an upcoming price surge according to its latest charts.
Bullish Indications
#1 Symmetrical Triangle Pattern Breakout: As you can see from the daily chart, FIXX had recently formed a symmetrical triangle pattern. This pattern is shown as pink lines. A symmetrical triangle pattern represents a period of consolidation before the price breaks out. This is typically formed when there is indecision in the price movements and uncertainty among the buyers and sellers. Once a breakout from the upper line occurs, it usually signifies the start of a new bullish trend. Currently, the stock has broken out of the symmetrical triangle pattern, indicating possible bullishness.
Daily Chart – FIXX
#2 Trading Above MAs: The stock is currently trading above both its 50-day and 200-day SMA, which implies that the bulls are currently in control.
#3 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 bullish.
#4 Bullish Stoch: The %K line is above the %D line of the stochastic in the daily chart, indicating possible bullishness.
#5 Bullish ADX: The ADX line has moved up from below –DI and +DI lines. The +DI and ADX lines are also currently above –DI line.
This indicates possible bullishness.
#6 IH&S Pattern: As you can see from the weekly chart, the stock is currently forming an Inverted Head and Shoulders (IH&S) pattern. This IH&S pattern is marked in the chart in orange color. An IH&S pattern is a strong bullish pattern. A breakout from this pattern usually indicates that the stock may move higher in the short term.
Weekly Chart – FIXX
#7 MACD above Signal Line: The MACD line (blue color) is currently above the signal line (orange color) in the weekly chart indicating possible bullishness.
#8 Bullish RSI: The RSI is currently above 50 and moving higher, which is a possible bullish sign.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, you can purchase half the intended quantity of shares of FIXX above yesterday’s close. This translates to a price of around $19.85.
TP: Our target prices are $22 and $30 in the next 4-6 months.
SL: To limit risk, place a stop loss at $18.40. Note that this stop loss is on a closing basis.
Our target potential upside is almost 11% to 51% in the next 4-6 months.
For a risk of $1.45, our target rewards are $2.15 and $10.15. This is an almost 1:2 and 1:7 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 symmetrical triangle pattern and IH&S 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 the sector.
Happy Trading!
Tara
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