The company that develops and commercializes testing products for the diagnosis, prognosis, and monitoring of complex autoimmune and autoimmune-related diseases under the AVISE brand, Exagen Inc. (NASDAQ: XGN) shows signs of an upcoming price surge according to its latest charts.
Bullish Indications
#1 Falling Wedge Breakout: The daily chart shows that the stock was trading within a falling wedge pattern during the past few months. This pattern is marked in the daily chart in purple color. The stock has currently broken out from it. Once the stock breaks out from a bullish pattern like the Falling Wedge Pattern, it has the potential to move further up.
Daily Chart – XGN
#2 MACD above Signal Line: The daily chart shows that the MACD line (blue color) has crossed above the MACD signal line (orange color). This is a possible bullish setup.
#3 Price above MA: The price is currently above the short-term moving average of 50-day SMA. This usually implies a possible bullish bias for the stock.
#4 Bullish ADX and DI: The ADX indicator shows bullishness because (+DI) is greater than (-DI), ADX and (+DI) are above (-DI), and ADX is moving up from below (-DI) and (+DI).
#5 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.
#6 Downtrend Broken: The weekly chart shows that the stock has currently broken out of the prevailing downtrend, and has started moving higher. The downtrend line is marked in pink color. This is a possible bullish indication.
#7 Bullish Stoch: The %K line (blue color) is above the %D (orange color) of the stochastic in the weekly chart. It is also moving higher from oversold levels. This is a possible bullish sign.
#8 Bullish MACD: The MACD line is above the signal line in the weekly chart as well. This is a possible bullish sign.
#9 Above Support Area: The weekly chart shows that the stock is currently above a support area. This is marked as an orange color dotted line. The current levels seem like a good area for the stock to bounce higher.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, the ideal buy level for XGN is above the 200-day SMA. This translates to a price of around $17.
TP: Our target prices are $20 and $25 in the next 4 to 6 months.
SL: To limit risk, place a stop loss below $15. Note that this stop loss is on a closing basis.
Our target potential upside is almost 18% to 47% in the next 4-6 months.
For a risk of $2.00, our first target reward is $3.00 and the second target reward is $8.00. This is a nearly 1:2 and 1:4 risk-reward trade.
Overall, this trade offers nearly 2x to 4x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the falling wedge 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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