The company that develops a cloud-based software platform for the digital advertising industry, Kubient Inc. (NASDAQ: KBNT) seems to be gearing up for a surge as per its latest charts.
Bullish Indications
#1 Symmetrical Triangle Pattern Breakout: The daily chart shows that the stock has currently broken out of a Symmetrical Triangle pattern. This is a continuation pattern and is characterized by two converging trend lines connecting a series of sequential peaks and troughs. This pattern is marked on the daily chart as pink color lines. A breakout from a symmetrical triangle pattern usually signifies the start of a bullish move.
Daily Chart – KBNT
#2 Price above MA: The price is currently above the short-term moving average of 50-day SMA. This usually implies a possible bullish bias for the stock.
#3 Bullish ADX and DI: The ADX indicator shows bullishness because (+DI) is greater than (-DI), and ADX has started to move up from below (-DI) and (+DI).
#4 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30 in the daily chart. This indicates bullishness.
#5 Bullish MACD: The MACD line is above the MACD signal line in the daily chart, indicating possible bullishness.
#6 Unbroken Uptrend: The weekly chart shows that the stock’s uptrend is unbroken, as it has been forming higher highs and higher lows. This uptrend line has been marked as a purple color line. This is a possible bullish sign.
Weekly Chart – KBNT
#7 Bullish Stoch: The weekly chart shows that the %K line (blue color) of the stochastic has currently crossed above the %D (orange color) line. This is a possible bullish sign.
#8 Other bullish signs: The weekly chart shows a bullish MACD, and bullish ADX and DI. The stock is also trading above its 50-week SMA. All these are bullish indications.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for KBNT is if it corrects to the price of $9.30. However, you can purchase half the intended quantity of shares of KBNT above yesterday’s close, at around $11.20.
TP: Our target prices are $15 and $18 in the next 3-6 months.
SL: To limit risk, place a stop loss at $8.60 (for entry near $11.20) and $6.00 (for entry near $9.30). Note that this stop loss is on a closing basis.
Our target potential upside is nearly 34% to 94% in the next 3-6 months.
- Entry near $9.30: For a risk of $3.30, the target rewards are $5.70 and $8.70. This is a nearly 1:2 and 1:3 risk-reward trade.
- Entry near $11.20: For a risk of $2.60, our target rewards are $3.80 and $6.80. 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 with high volume from the symmetrical triangle pattern. 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 its sector.
Happy Trading!
— Tara