The company that provides oilfield services to oil and gas companies in the Middle East, North Africa, and the Asia Pacific regions, National Energy Services Reunited Corp (NASDAQ: NESR) shows signs of an upcoming price surge according to its latest charts.
#1 Symmetrical Triangle Pattern Breakout: The daily chart shows that the stock was forming a symmetrical triangle pattern over the past few months. This pattern is shown as purple color lines. A symmetrical triangle pattern represents a period of consolidation before the price breaks out. This is typically formed when there is indecision in the price movements and uncertainty among the buyers and sellers. Once a breakout from the upper line occurs, it usually signifies the start of a new bullish trend. Currently, the stock has broken out of the symmetrical triangle pattern with high volume, indicating possible bullishness.
#2 Above MAs: The stock is currently trading above its 50-day as well as 200-day SMA and had moved higher with high volume. This indicates an overall bullishness of the stock.
#3 Bullish Stoch: The %K line of the stochastic is above the %D line, which is a possible bullish indication.
#4 Bullish ADX and DI: The daily chart shows that the +DI line is currently above the –DI line and the ADX line is starting to move higher from below the +DI and -DI lines. This indicates possible bullishness
#5 MACD above Signal Line: As you can see from the daily chart, the MACD line (blue color) is currently above the signal line (orange color). This indicates a possible bullish bias.
#6 Downtrend Broken: The weekly chart shows that the stock has currently broken out of the short-term downtrend. This downtrend line is shown in pink color. Currently, the stock started a new uptrend is also trading above a support area which is marked as a green color dotted line. So, the current level seems like a good area for the stock to move higher.
#7 Bullish Stoch: The %K line (blue color) of the stochastic is currently above the %D line (orange color) in the weekly chart as well, indicating possible bullishness.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, the ideal buy level for NESR is above yesterday’s close, which translates to a price of around $8.70.
TP: Our target prices are $10.50 and $14 in the next 2s-6 months.
SL: To limit risk, place a stop loss at $7.50. Note that this stop loss is on a closing basis.
Our target potential upside is almost 21% to 61% in the next 3-6 months.
For a risk of $1.20, our target rewards are $1.80 and $5.30. This is almost 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 symmetrical 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 the sector.
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