The company that designs, develops, and engineers antenna products for original equipment and design manufacturers, chipset vendors, service providers, and value-added resellers and distributors worldwide, Airgain Inc. (NASDAQ: AIRG) shows signs of an upcoming price surge according to its latest charts.
Bullish Indications
#1 Channel Breakout: The daily chart shows that the stock has been trading within a channel for the past few weeks. This channel is marked in the daily chart in purple color dotted lines. Currently, the stock has broken out of this channel, indicating that it has the potential to surge ahead.
Daily Chart – AIRG
#2 Symmetrical Triangle Pattern Breakout: The daily chart shows that the stock was forming a symmetrical triangle pattern. This pattern is shown as pink color 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.
#3 Above MAs: The stock is currently trading above its 50-day as well as 200-day SMA, indicating the overall bullishness of the stock.
#4 Bullish ADX: The ADX has currently moved up from below –DI and +DI lines. The +DI line and the ADX line is also currently above –DI line. All these indicate possible bullishness.
#5 MACD above Signal Line: As you can see from the daily chart, the MACD line (blue color) is currently above the signal line (orange color). This indicates a possible bullish bias.
#6 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.
#7 Downtrend Broken and Above Support Area: The weekly chart shows that the stock has broken out of a short-term downtrend. This is marked in pink color lines. The stock is also currently above a support area, which is marked as an orange color dotted line. This seems like a good area for the stock to bounce higher.
Weekly Chart – AIRG
#8Bullish MACD: The MACD line is above the signal line in the weekly chart as well, indicating a possible bullish bias.
#9 Bullish Stochastic: The %K (blue) line of stochastic is currently above the %D (Orange) line in the weekly chart. This is a possible bullish indication.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, you can buy half the intended quantity of shares of AIRG above the price of $11.50. The rest of the shares can be purchased if the stock corrects to the price of $10.00.
TP: Our target prices are $14 and $18 in the next 3-6 months.
SL: To limit risk, place a stop loss at $9.75 (for entry near $11.50) and $8.80 (for entry near $10.00). Note that this stop loss is on a closing basis.
Our target potential upside is almost 22% to 80% in the next 3-6 months.
- Entry near $10: For a risk of $1.20, our target rewards are $4.00 and $8.00. This is almost 1:3 and 1:7 risk-reward trade.
- Entry near $11.50: For a risk of $1.75, our target rewards are $2.50 and $6.50. This is almost 1:2 and 1:4 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 channel and 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
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