Clever Leaves Holdings Inc. (NASDAQ: CLVR) seems to be ready for a price surge according to its latest charts. Clever Leaves Holdings Inc. cultivates, extracts, manufactures, and commercializes pharmaceutical-grade cannabinoid products. The company operates through two segments, Cannabinoid and Non-Cannabinoid.
Bullish Indications
#1 Descending Triangle Pattern Breakout: The stock’s daily chart shows that it has recently broken out of a descending triangle pattern in an upward direction. This descending triangle pattern is marked in pink color on the daily chart. An upward breakout from a bearish pattern like the descending Triangle is typically a good bullish sign.
Daily Chart – CLVR
#2 MACD above Signal Line: As you can see from the daily chart, the MACD line (blue color) is currently above the MACD signal line (orange color). This indicates a possible bullish bias.
#3 Price above MA: The stock is currently trading above its 50-day SMA. This shows that the bulls are currently in control.
#4 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30. This indicates possible bullishness.
#5 Bullish ADX and DI: The ADX indicator shows bullishness because (+DI) as well as the ADX line are greater than (-DI), and the ADX line has started to move up from below (-DI) and (+DI).
#6 Above Previous Lower High: The daily chart shows that the stock is currently trading above its previous lower-high, indicating that the downtrend has been broken. This is a bullish sign.
#7 Double Bottom Pattern: From the weekly chart, we can see that the stock is currently forming a double bottom pattern. This pattern is marked in purple color in the chart. A double bottom pattern is a strong bullish pattern. A breakout from the pattern usually foretells the possibility of an upmove in the short term.
Weekly Chart – CLVR
#8 Bullish RSI: In the weekly chart, the RSI is moving up from oversold levels and is currently above 50. This is a possible bullish sign.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, the ideal buy level for CLVR is above the breakout level of the double bottom pattern. This translates to a price of around $13.00.
TP: Our target prices are $16 and $20 in the next 3-6 months.
SL: To limit risk, place a stop loss at $11.20. Note that the stop loss is on a closing basis.
Our target potential upside is almost 23% to 54% in the next 3-6 months.
For a risk of $1.80, our target rewards are $3.00 and $7.00. This is a 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 breakout level of the descending 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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