The company that develops novel therapies to treat ophthalmic diseases with a focus on age-related and orphan inherited retinal diseases (IRDs), IVERIC bio Inc. (NASDAQ: ISEE) seems to be gearing up for a surge as per its latest charts.
Bullish Indications
#1 Symmetrical Triangle Pattern Breakout: The stock has currently broken out of a Symmetrical Triangle pattern which is a possible bullish sign. This is marked on the daily chart as pink color lines. A symmetrical triangle is a continuation pattern and is characterized by two converging trendlines connecting a series of sequential peaks and troughs. A breakout from a symmetrical triangle pattern is a possible bullish indication.
Daily Chart – ISEE
#2 Trading above MAs: The stock is currently trading above both the short-term moving average of 50-day SMA and the longer-term moving average of 200-day SMA. This implies a possible bullish bias for the stock.
#3 Bullish Stoch: The daily chart shows that the %K line is above the %D line of the stochastic, indicating possible bullishness.
#4 MACD above Signal Line: The daily chart shows that the MACD line (blue color) has crossed above the signal line (orange color). This is a possible bullish setup.
#5 Bullish ADX: The ADX line has started to move up from below –DI and +DI lines. The ADX line is currently above the -DI line. The +DI line is also currently above –DI line. All these indicate possible bullishness.
#6 Ascending triangle pattern: The weekly chart shows that the stock has been forming an Ascending Triangle pattern. An Ascending Triangle pattern is a bullish pattern. This is marked on the chart in purple color lines. A breakout from this pattern typically indicates bullishness. The base of the triangle generally acts as a good support level after the breakout.
Weekly Chart – ISEE
#7 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30 in the weekly chart. This indicates bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for ISEE is above the price of $8.20. This is marked as a green color dotted line in the charts.
TP: Our target prices are $12 and $15 in the next 3-6 months.
SL: To limit risk, place a stop loss at $6.20. Note that this stop loss is on a closing basis.
Our target potential upside is nearly 46% to 83% in the next 3-6 months.
For a risk of $2.00, the 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 ascending 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
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