The company that develops, manufactures, and markets three-dimensional (3D) printing machines, 3D printed and other products, materials, and services, ExOne Co (NASDAQ: XONE) seems to be poised for a price surge as per its latest charts.
#1 Channel Support: As you can see from the daily chart, the stock was trading within a downtrend channel during the past few weeks. This is marked in the daily chart in purple color lines. Currently, the stock is moving higher after taking support at the lower rail of the trend channel. Once a stock breaks out from a channel, it has the potential to move further up.
#2 Price above MA: The price is currently above the longer-term moving average of 200-day SMA, indicating that the bulls are still in control. This is a positive indication.
#3 MACD Above Signal Line: In the daily chart, the MACD line (light blue color) is currently above the MACD signal line (orange color) which is typically considered bullish.
#4 Bullish ADX: The ADX line has started to move up from below –DI and +DI lines. The +DI line is also currently above –DI line. This indicates possible bullishness.
#5 Bullish Stoch: The %K line is above the %D line of the stochastic in the daily chart and is also moving higher from oversold levels. All these indicate possible bullishness.
#6 Above Support Area: As seen in the weekly chart, the stock had bounced higher after taking support near a long-term support area. The support level is marked as an orange color dotted line. The stock is also trading above its 50-week as well as 200-week SMA. All these are possible bullish signs.
#7 Bullish RSI: As seen in the weekly chart, the RSI had moved higher from oversold levels and is currently above 50. This indicates possible bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for XONE is above the price of $11.70. However, those with a higher risk appetite can purchase the shares of XONE above yesterday’s high. This translates to a price of around $10.85.
TP: Our target prices are $14 and $18 in the next 4-6 months.
SL: To limit risk, place stop-loss at $8.80 (for entry near $10.85) and $10.30 (for entry near $11.70). Note that the stop-loss is on a closing basis.
Our target potential upside is 19% to 66% in the next 4 to 6 months.
- Entry near $10.85: For a risk of $2.05, our target rewards are $3.15 and $7.15. This is a 1:2 and 1:4 risk-reward trade.
- Entry near $11.70: For a risk of $1.40, our target rewards are $2.30 and $6.30. This is a 1:2 and 1:5 risk-reward trade.
In other words, this trade offers nearly 2x to 5x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the downtrend channel and support area 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.