The Jacksonville, Florida-based company that engages in the real estate development and management business, St. Joe Co. (NYSE: JOE) seems to be gearing up for a surge as per its latest charts.
Bullish Indications
#1 Channel Breakout: The daily chart shows that the stock had formed a trend channel in the last few months. This is marked as pink color dotted lines. Currently, the stock has broken out from the upper rail of this trend channel. Once a stock breaks out of a channel, it usually trends higher.
Daily Chart – JOE
#2 Price above MAs: The price is currently above both the short-term moving average of 50-day SMA and the longer-term moving average of 200-day SMA. This usually implies a possible bullish bias for the stock.
#3 MACD above Signal Line: The daily chart shows that the MACD line (blue color) is currently above the MACD signal line (orange color). This is a possible bullish setup.
#4 %K above %D: The %K line of the stochastic is currently above the %D line in the daily chart, indicating possible bullishness.
#5 Bullish ADX and DI: The ADX indicator shows bullishness in the daily chart because (+DI) is greater than (-DI), and ADX is moving up from below (-DI) and (+DI).
#6 Ascending Triangle Pattern Breakout: In the daily chart, we can see that the stock has currently broken out of an ascending triangle pattern. This pattern is marked in the chart in purple color. An ascending triangle pattern is a strong bullish pattern and a breakout from it indicates that the stock may move higher in the short term.
#7 Above Support Area: The stock is currently trading above a strong resistance-turned-support area, which is marked as an orange color dotted line. This is a positive indication.
Weekly Chart – JOE
#8 MACD above Signal Line: The MACD line (blue color) is currently above the signal line (orange color) in the weekly chart as well, indicating a bullish bias.
#9 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30 in the weekly chart. This indicates possible bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal entry level for JOE is above the resistance level of $26.
TP: Our target prices are $30 and $35 in the next 3-6 months.
SL: To limit risk, place a stop loss at $23.40. Note that this stop loss is on a closing basis.
Our target potential upside is nearly 15% to 35% in the next 3-6 months.
For a risk of $2.60, the target rewards are $4.00 and $9.00. 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 channel breakout level and ascending triangle pattern breakout level. 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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