The company that provides ocean shipping services across the Pacific to Hawaii, Alaska, Guam, Micronesia, the South Pacific, China, and Japan, Matson Inc. (NYSE: MATX) seems to be getting ready for a price bump in the short-term as per the latest charts.
Bullish Move – Chart Indications
#1 Downtrend Channel Pattern Breakout: As you can see from the daily chart, the stock has been forming a downtrend channel during the past several months. This is marked in purple color in the daily chart below. The stock had typically taken support at the bottom of the channel before bouncing back. The stock has currently broken out of this channel with a high volume, indicating bullishness.
Daily Chart – MATX
#2 Price above MAs: The stock is currently above the 50-day as well as 200-day SMA, indicating that the bulls are currently in control.
#3 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.
#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 ADX and DI: The ADX indicator shows bullishness because (+DI) is greater than (-DI), and the ADX line has started rising from below both (+DI) and (-DI).
#6 Bullish Stoch: The %K line is currently above the %D line of the stochastic in the daily chart, indicating possible bullishness.
#7 Double Bottom Pattern: The weekly chart shows that the stock is forming a double bottom pattern. This is marked in the chart in orange color. A double bottom pattern is a bullish reversal pattern and a breakout from it indicates that the stock could move upwards.
Weekly Chart – MATX
#8 Bullish MACD: The MACD line is above the signal line in the weekly chart and is also moving higher from oversold levels. All these indicate a possible bullish bias.
#9 Bullish Stoch: The %K line is currently above the %D line of the stochastic in the weekly chart as well, indicating possible bullishness.
#10 Bullish RSI: The RSI is currently above 50 and moving higher in the weekly chart. This is a possible bullish indication.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for MATX is if it trades above the price of around $38.
TP: Our target prices are $42 and $50 in the next 2 to 6 months.
SL: To limit risk, place a stop loss at $35.30. Note that the stop loss is on a closing basis.
Our target potential upside is 11% to 32% in the next 3-6 months.
For a risk of $2.70, our target rewards are $4.00 and $12.00. This is a nearly 1:2 and 1:4 risk-reward trade.
In other words, this trade offers 2x to 4x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the downtrend channel 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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