The clinical-stage biopharmaceutical company focused on the acquisition, development, and commercialization of medically important pharmaceutical products for the treatment of cancer and other underserved therapeutic needs, TG Therapeutics Inc. (NASDAQ: TGTX) seems poised for a price surge according to its latest charts.
Bullish Indications
#1 Symmetrical Triangle Pattern Breakout: As seen in the daily chart, a symmetrical triangle pattern was formed during the past few weeks. This pattern is shown in pink color lines and represents a period of consolidation before the price breaks out.
A symmetrical triangle pattern is typically formed when there is an indecision in the price movements and uncertainty among the buyers and sellers. Once a breakout from the upper trend line of the pattern occurs, it usually signifies the start of a new bullish trend. Currently, the stock has broken out of the symmetrical triangle pattern, indicating bullishness.
Daily Chart – TGTX
#2 Above MAs: The stock price is currently above both 50-day as well as 200-day SMA. This is a possible bullish sign.
#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 risen above 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), indicating bullishness.
#5 Bullish Stoch: The %K line is above the %D line of the stochastic and it has moved up from oversold levels, indicating possible bullishness.
#6 Cup and Handle pattern Breakout: The weekly chart shows that the stock has been forming a cup and handle pattern. This is marked in the chart below in purple color. A cup and handle pattern is a consolidation and breakout pattern. A breakout from this pattern indicates that the stock may move higher. Typically, stocks retrace to the breakout level again before continuing the upmove.
Weekly Chart – TGTX
#7 Bullish MACD, Stoch: In the weekly chart as well, the MACD line is above the signal line. The %K line of stoch is also above %D line. All these indicate bullishness.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, the ideal buy price for TGTX is if it corrects to the breakout level of the symmetrical triangle pattern at around $13.
However, for those with a higher risk appetite, you can purchase half the intended quantity of shares of TGTX if it trades above yesterday’s close. This translates to a price of around $17.20.
TP: Our target prices are $24 and $28 in the next 4-6 months.
SL: To limit risk, place a stop loss at $12.90 (for entry near $17.20) and $10.30 (for entry near $13). Note that this stop loss is on a closing basis.
Our target potential upside is 40% to 115% in the next 4-6 months.
- Entry near $13: For a risk of $2.70, our target rewards are $11.00 and $15.00. This is a nearly 1:4 and 1:6 risk-reward trade.
- Entry near $17.20: For a risk of $4.30, our target rewards are $6.80 and $10.80. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers nearly 2x to 6x 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. 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