The company that provides call center operations, clinical alerting and notifications, one-way and advanced two-way wireless messaging services, mobile communications and public safety solutions, Spok Holdings Inc. (NASDAQ: SPOK) shows signs of an upcoming price surge according to its latest charts.
Bullish Indications
#1 Channel Breakout: The daily chart of SPOK shows that the stock was trading within a channel for the past few months. This channel is marked in the daily chart in purple color. Currently, the stock has broken out of this channel with high volume, indicating that it has the potential to surge ahead.
Daily Chart – SPOK
#2 Above MA: The stock is currently trading above its short-term moving average of 50-day SMA. This indicates the overall bullishness of the stock.
#3 MACD above Signal Line: As you can see from the daily chart, the MACD line (blue color) has currently crossed above the MACD signal line (orange color).
This indicates a possible bullish bias.
#4 Bullish Stoch: The %K line is above the %D line of the stochastic in the daily chart.
It is also moving up from oversold levels.
All these indicate possible bullishness.
#5 Bullish RSI: The daily chart shows that the RSI is currently above 50 and moving higher, indicating the strength of the current upmove.
#6 Fibonacci Support: The weekly chart shows that the stock has currently bounced back higher after taking support at the 23.6% Fibonacci level. This is a possible bullish sign.
Weekly Chart – SPOK
#7 Bullish Engulfing: The latest candlestick pattern being formed in the weekly chart is a bullish engulfing pattern, wherein a smaller red candle is engulfed by a larger green candle. A bullish engulfing pattern is a bullish reversal pattern and usually implies that the stock may move higher soon.
#8 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart as well, indicating possible bullishness.
#9 Bullish RSI: The RSI is currently above 50 and moving higher in the weekly chart as well. This 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 the shares of SPOK if it closes above the 200-day SMA. This translates to a price of around $12.25.
TP: Our target prices are $15 and $18 in the next 3-6 months.
SL: To limit risk, place a stop loss at $10.50. Note that this stop loss is on a closing basis.
Our target potential upside is almost 22% to 47% in the next 3-6 months.
For a risk of $1.75, our target rewards are $2.75 and $5.75. This is an almost 1:2 and 1:3 risk-reward trade.
In other words, this trade offers 2x to 3x rewards when compares to risks.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the channel. 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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