Media company, TEGNA Inc. (NYSE: TGNA) seem to be poised for a price surge as per its latest charts. The company operates television stations that deliver television programming and digital content. It offers content and information to consumers across various platforms; and owns and operates two multicast networks, True Crime Network, and Quest.
Bullish Indications
#1 Falling Wedge Pattern Breakout: As you can see from the daily chart, the stock has been trading within a falling wedge pattern during the past few weeks. This is marked in pink color in the daily chart. Currently, the stock has broken out of the falling wedge pattern. A Falling Wedge Pattern is a bullish pattern. Once a stock moves up and breaks out from it, it has the potential to move further up.
TGNA – Daily Chart
#2 Strong Stochastics: The stochastics oscillator shows that the %K (blue) line is currently above the %D (orange) line and moving up. This indicates bullishness.
#3 Bullish ADX and DI: The ADX indicator shows bullishness as the +DI line is above the -DI line. The ADX line is also currently moving higher from below the +DI and -DI lines.
#4 Above MAs: In the daily chart, the stock is currently trading above both 50-day and 200-day SMA. This implies that the bulls are currently in control.
#5 Bullish MACD: The MACD line (blue line) is currently above the MACD signal line (orange line) in the daily chart, indicating a possible reversal from the current short-term downtrend.
#6 Flag Pattern Breakout: As seen in the weekly chart, the stock was in a strong uptrend after which it started consolidating and was in a narrow range. This is a classic flag pattern, which is a continuation pattern. The flag pattern is marked in purple color in the weekly chart. Whenever a stock breaks out of the flag pattern, it typically continues its previous trend which is an uptrend in this case.
TGNA – Weekly Chart
#7 MACD above Signal Line: The MACD line (blue line) is currently above the MACD signal line (orange line) in the weekly chart, indicating bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase the shares of TGNA if it trades above yesterday’s close, which translates to a price of around $18.85.
TP: Our target prices are $21.50 and $26.00 in the next 3-6 months.
SL: To limit risk, place stop-loss at $17.30. Note that stop loss is on a closing basis.
Our target potential upside is 14% to 38% in the next 3-6 months.
For a risk of $1.55, our target rewards are $2.65 and $7.15. This is a 1:2 and 1:5 risk-reward trade.
In other words, this trade offers nearly 2x to 5x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the falling wedge pattern 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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