The Pennsylvania-based company in the medical device industry whose products include diagnostic testing kits, OraSure Technologies, Inc. (NASDAQ: OSUR) seems to be getting ready for a price bump in the short-term as per the latest charts.
Bullish Move – Chart Indications
#1 Uptrend Channel Support: As you can see from the daily chart of OSUR, the stock has been forming an uptrend channel during the past several weeks. This is marked in purple color in the daily chart below. The stock has currently taken support at the bottom of the channel and is moving higher, indicating possible bullishness.
Daily Chart – OSUR
#2 Price above MAs: The stock is currently above the 50-day as well as 200-day SMA, indicating that the bulls are currently in control.
#3 MACD above Signal Line: In the daily chart, the MACD (light blue color) is currently above the MACD signal line (orange color). This indicates a possible bullish setup.
#4 Bullish ADX and DI: The ADX indicator shows bullishness because (+DI) is greater than (-DI), ADX and (+DI) are above (-DI), and ADX has started to rise higher from below both (+DI) and (-DI).
#5 Bullish Stoch: The %K line has currently crossed above the %D line of the stochastic in the daily chart, indicating possible bullishness.
#6 Downtrend Broken: The weekly chart shows that the stock has currently broken out of a long-term downtrend and moved higher. This downtrend line is marked as a pink color line. This is a possible bullish indication. Currently, the stock is consolidating within a range, which is marked as a blue color rectangle. Once the stock breaks out of this range, it could surge higher.
Weekly Chart – OSUR
#7 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart as well, indicating possible bullishness.
#8 Double Bottom Pattern: The stock’s weekly chart shows that it is currently forming a double bottom pattern. The double bottom pattern is marked in orange color. A double bottom pattern is a strong bullish pattern and a breakout from it indicates a possible upmove in the short term.
#9 Bullish MACD: The MACD line is above the signal line in the weekly chart as well, indicating a possible bullish bias.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for OSUR is above the breakout level of the double bottom pattern, at around $18.50.
TP: Our target prices are $22 and $26 in the next 2 to 6 months.
SL: To limit risk, place a stop loss at $16.20. Note that the stop loss is on a closing basis.
Our target potential upside is 20% to 41% in the next 3-6 months.
For a risk of $2.30, our target rewards are $3.50 and $7.50. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers 2x to 3x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the double bottom pattern with 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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