The clinical-stage biopharmaceutical company that focuses on the discovery, development, and commercialization of novel treatments for patients suffering from hematological and musculoskeletal disorders with a high unmet medical need, Keros Therapeutics Inc. (NASDAQ: KROS) seems to be poised for a price surge as per its latest charts.
Bullish Indications
#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 for the past several weeks. This trendline is shown in purple color in the daily chart below. The stock is currently moving up after taking support on the trendline. This is a possible bullish sign.
Daily Chart – KROS
#2 Price above MA: The daily chart shows that the stock is currently above its short-term moving average of 50-day SMA. This is also a bullish sign.
#3 MACD above Signal Line: The daily chart shows that the MACD (light blue color) is currently above the MACD signal line (orange color). This is a possible bullish indication.
#4 Bullish ADX and DI: The ADX indicator shows bullishness because the (+DI) line is currently greater than (-DI), and ADX has started to move up from below (-DI) and (+DI).
#5 Bullish Stoch: The %K line of the stochastic is above the %D line in the daily chart and is currently moving higher from oversold levels. All these indicate possible bullishness.
#6 High Volume Bullish Candle, Low Volume Correction: The weekly chart shows that the stock had corrected with low volumes during the past few weeks. Currently, it has formed a strong bullish candle with a high volume near the trendline support. This usually indicates that the stock’s uptrend would resume again.
Weekly Chart – KROS
#7 RSI moving up: The RSI is above 50 and moving up on the weekly chart, indicating strength.
#8 Bullish ADX and DI: The ADX indicator shows bullishness in the weekly chart as well because the +DI line and the ADX line is above the -DI line.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase shares of KROS if it trades above the price of around $46.60.
TP: Our target prices are $55 and $60 in the next 4 to 6 months.
SL: To limit risk, place the stop loss below $41.40. Note that stop loss is on a closing basis.
Our target potential upside is 18% to 29% in the next 4-6 months.
For a risk of $5.20, our target rewards are $8.40 and $13.40. This is a 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 from the trendline support with a 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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