The real estate investment trust which engages in owning, operating, and acquiring industrial properties, Rexford Industrial Realty Inc. (NYSE: REXR) seems to be gearing up for a surge as per its latest charts.
Bullish Indications
#1 Ascending Triangle Pattern Breakout: The daily chart shows that the stock has currently broken out of an Ascending Triangle pattern. An Ascending Triangle pattern is a bullish pattern. This is marked on the daily chart in purple color lines. A breakout from an ascending triangle pattern generally indicates the start of a bullish trend. The breakout level also acts as a good support level.
Daily Chart – REXR
#2 Trading Above MAs: The stock is currently trading above both its 50-day and 200-day SMA, which implies that the bulls are currently in control.
#3 Bullish ADX and DI: The ADX indicator shows bullishness because (+DI) is greater than (-DI), and ADX is rising from below both (+DI) and (-DI).
#4 Bullish RSI: The RSI in the daily chart is currently above 50.
This is a possible bullish sign.
#5 Fibonacci Support: Usually, after an up-move, stocks typically retrace to any of the key Fibonacci levels before surging back again.
REXR had taken support at the 23.6% Fibonacci support level as seen in the weekly chart before moving higher again to close above the 61.8% Fibonacci level by forming a high-volume candle. This is marked as an orange color ellipse in the weekly chart. The stock is also currently trading above its 50-week as well as 200-week SMA. Overall, the current levels appear to be a strong area for the stock to surge higher.
Weekly Chart – REXR
#6 Bullish Stoch: The weekly chart shows that the %K line is above the %D line of the stochastic, indicating possible bullishness.
#7 MACD above Signal Line: The MACD (light blue color) is currently above the MACD signal line (orange color) in the weekly chart. This typically indicates a bullish setup.
#8 Bullish ADX and DI: In the weekly chart as well, the ADX line as well as the +DI line is currently above the -DI line. This is a possible bullish sign.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase the shares of REXR at the price of around $45.
TP: Our target prices are $50 and $55 based on the breakout from the Ascending Triangle pattern.
SL: To limit risk, place a stop loss near $41.60. Note that the stop loss is on a closing basis.
Our target potential upside is 11% to 22% in the next 4-6 months.
For a risk of $3.40, the target rewards are $5.00 and $10.00. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers nearly 2x to 3x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the ascending 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 its sector.
Happy Trading!
Tara
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