Comcast Corporation (NASDAQ: CMCSA) seems to be getting ready for a price bump in the short-term as per the latest charts. Comcast Corporation operates as a media and technology company worldwide. It operates through Cable Communications, Cable Networks, Broadcast Television, Filmed Entertainment, Theme Parks, and Sky segments. The company also owns the Philadelphia Flyers, as well as the Wells Fargo Center arena in Philadelphia, Pennsylvania; and provides streaming service, such as Peacock.
Bullish Move – Chart Indications
#1 Downtrend Channel Breakout: As you can see from the daily chart, the stock has been trading within a downtrend channel during the past several months. This is marked in pink color. The stock had typically taken support at the bottom of the channel before bouncing back. The stock has currently broken out of the downtrend channel, indicating possible bullishness.
CMCSA – Daily Chart
#2 MACD above Signal Line: In the daily chart, the MACD (light blue color) is currently above the MACD signal line (orange color). This indicates a possible bullish setup.
#3 Bullish RSI: The RSI is above 50 and moving higher, indicating the strength of the current upmove.
#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 possible bullishness.
#5 Flag Pattern Breakout: As you can see from 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 and is marked in the chart in purple color. A Flag is a continuation pattern. Whenever a stock breaks out of the flag pattern, it typically continues its previous trend (uptrend in this case). Currently, the stock has broken out of the flag pattern, indicating possible bullishness. The stock is also trading above its 200-week SMA, indicating that the bulls are presently in control.
CMCSA – Weekly Chart
#6 Oversold RSI: The weekly chart shows that the RSI is currently moving higher from oversold levels, indicating that a trend reversal may be imminent.
#7 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart, indicating possible bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for CMCSA is above $51.50.
TP: Our target prices are $56.80 and $60 in the next 3 to 6 months.
SL: To limit risk, place a stop loss at $48.50. Note that the stop loss is on a closing basis.
Our target potential upside is 10% to 17% in the next 3-6 months.
For a risk of $3.00, our first target reward is $5.30 and the second target reward is $8.30. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers 2x to 3x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the downtrend channel breakout level with 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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