The American biotechnology company focused on the discovery, development, and commercialization of synthetic DNA products for treating cancers and infectious diseases, Inovio Pharmaceuticals Inc. (NASDAQ: INO) seem to be gearing up for a surge as per its latest charts.
#1 Trendline Support: As you can see from the daily chart, the stock has been on an uptrend, as it has been forming higher highs and higher lows. This trendline is marked as a blue color dotted line. The stock is currently moving higher after taking support at its uptrend line. This seems like a bullish indication.
#2 Price above MA: The price is currently above its longer-term moving average of 200-day SMA. This implies that there is still a bullish bias for the stock.
#4 Bullish ADX and DI: The ADX indicator shows bullishness because the (+DI) line and the ADX line are greater than (-DI), and ADX has moved up from below (-DI) and (+DI) lines.
#5 Bullish MACD: The MACD line is above the MACD signal line in the daily chart. The MACD indicator is also moving higher from oversold levels. All these indicate possible bullishness.
#6 Fibonacci Support: Usually, after an up-move, stocks retrace to any of the key Fibonacci levels before surging back again. INO had taken support at the 23.6% Fibonacci support level and bounced higher as seen in the weekly chart. This seems like a good support area for the stock to bounce upwards.
#7 Above Support Area: The stock is currently trading above a long-term support area, which is marked as a green color line. This is a possible bullish indication.
#8 Bullish RSI: The RSI had moved higher from oversold levels and is currently near 50. This is a possible bullish indication.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase the shares of INO above yesterday’s close. This translates to a price of around $13.70.
TP: Our target prices are $20 and $30 in the next 3-6 months.
SL: To limit risk, place a stop loss at $9.40. Note that this stop loss is on a closing basis.
Our target potential upside is nearly 46% to 119% in the next 3-6 months.
For a risk of $4.30, the target rewards are $6.30 and $16.30. This is a nearly 1:2 and 1:4 risk-reward trade.
In other words, 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 trendline support and the support area. 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.
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