The American corporation that produces flavors, fragrances, and cosmetic actives, International Flavors & Fragrances Inc. (NYSE: IFF) seems to be poised for a price surge as per its latest charts.
Bullish Indications
#1 Downtrend Channel Breakout: As you can see from the daily chart, the stock has been trading within a downtrend channel during the past few months. This is marked in the daily chart in purple color. Currently, the stock has broken out of the downtrend channel. Once the stock breaks out from a downtrend channel, it has the potential to move further up.
Daily Chart – IFF
#2 Price above MA: The price is currently above the short-term moving average of 50-day SMA. This is a possible 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 typically indicates a bullish setup.
#4 Bullish ADX and DI: The ADX indicator shows bullishness because the (+DI) line is greater than the (-DI) line and the ADX line has moved up from below both the (+DI) line and the (-DI) line.
#5 Bullish Stoch: The %K line is above the %D line of the stochastic in the daily chart, indicating possible bullishness.
#6 Above Support Area: As you can see from the daily chart, the stock has currently moved up from a resistance-turned-support level. This level is marked as a purple color dotted line. This looks like a good area for the stock to move higher.
Weekly Chart – IFF
#7 Bullish RSI: The weekly chart shows that the RSI has currently crossed above 50 and is moving up, indicating possible bullishness.
#8 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart as well, indicating possible bullishness.
#9 MACD Above Signal Line: The MACD line has currently crossed above the MACD signal line in the weekly chart as well, indicating possible bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase the shares of IFF if it trades above the 200-day SMA, which translates to a price above $120.50.
TP: Our target prices are $128 and $135 in the next 4-6 months.
SL: To limit risk, place stop-loss at $115.80. Note that the stop-loss is on a closing basis.
Our target potential upside is 6% to 12% in the next 4 to 6 months.
For a risk of $4.70, our target rewards are $7.50 and $14.50. 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 from the downtrend channel breakout level 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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