The company that supplies hydroponics equipment under the iPower and Simple Deluxe brands through its Zenhydro.com website and various third-party e-commerce channels, and whose products include advanced indoor and greenhouse grow-light systems, ventilation systems, activated carbon filters, nutrients, growing media, hydroponic water-resistant grow tents, trimming machines, pumps, and accessories for hydroponic gardening, as well as other indoor and outdoor growing products, iPower Inc. (NASDAQ: IPW) seems poised for a price surge according to its latest charts.
Bullish Indications
#1 Symmetrical Triangle Pattern Breakout: As seen in the daily chart, a symmetrical triangle pattern was formed during the past few months. This pattern, shown in pink color lines, represents a period of consolidation before the price breaks out. A symmetrical triangle pattern is typically formed when there is an indecision in the price movements and uncertainty among the buyers and sellers. Once a breakout from the upper trend line of the pattern occurs, it usually signifies the start of a new bullish trend. Currently, the stock has broken out of the symmetrical triangle pattern, indicating bullishness.
Daily Chart – IPW
#2 Bullish ADX and DI: The ADX indicator shows bullishness because the (+DI) line and the ADX line are greater than the (-DI) line and the ADX line has started to move higher from below both (+DI) and (-DI) lines.
#3 Bullish Stoch: The %K line (blue color) of the stochastic is currently above the %D line (orange color) in the daily chart, indicating possible bullishness.
#4 Bullish Engulfing: The latest candlestick pattern in the weekly chart is a bullish engulfing pattern. This is marked as an orange ellipse. This pattern is formed when a small black candlestick is followed by a large white candlestick, the body of which completely overlaps or engulfs the body of the previous candlestick. A bullish engulfing pattern is a bullish reversal pattern and usually implies that the stock may move higher soon.
Weekly Chart – IPW
#5 Bullish ADX and DI: The weekly chart also shows bullishness as the +DI line is currently above the –DI line. This indicates possible bullishness.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, the ideal buy level for IPW is above the price of $8.50.
TP: Our target prices are $12 and $15 in the next 4-6 months.
SL: To limit risk, place a stop loss at $6.50. Note that this stop loss is on a closing basis.
Our target potential upside is 41% to 77% in the next 4-6 months.
For a risk of $2.00, our target rewards are $3.50 and $6.50. 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 with high volume from the breakout level of 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 the sector.
Happy Trading!
— Tara
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