Vodafone Group Plc (NASDAQ: VOD) seems to be ready for a price surge according to its latest charts. Vodafone Group Public Limited Company engages in telecommunication services in Europe and internationally. The company offers mobile services that enable customers to call, text, and access data; fixed line services, including broadband, television (TV) offerings, and voice; and convergence services under the GigaKombi and Vodafone One names to customers. It also provides value added services, such as Internet of Things (IoT).
The stock was also a part of our recent watchlist.
Bullish Indications
#1 Falling Wedge Breakout: The daily chart shows that the stock was trading within a falling wedge pattern during the past few months. This pattern is marked in the daily chart in purple color. The stock has currently broken out from it. Once the stock breaks out from a bullish pattern like the Falling Wedge Pattern, it has the potential to move further up.
VOD – Daily Chart
#2 Price above MAs: The stock is currently trading above its 50-day as well as 200-day SMA. This shows that the bulls are currently in control.
#3 Bullish MACD: The MACD line (blue color) is currently above the MACD signal line (orange color) in the daily chart. This indicates a possible bullish bias.
#4 Bullish ADX and DI: The ADX indicator shows bullishness because the ADX line and (+DI) line are above the (-DI) line, and ADX has started rising from below both (+DI) and (-DI). These point to a possible upmove in the near-term.
#5 Uptrend Channel: The weekly chart shows that the stock has been trading within an uptrend channel. It is currently moving higher after taking support at the lower rail of the trend channel. This indicates possible bullishness.
VOD – Weekly Chart
#6 Above MA: The stock is currently trading above its 50-week SMA, indicating that the bulls are in control.
#7 Bullish RSI: The RSI is currently above 50 and moving up, indicating the strength of the current upmove.
#8 Bullish MACD: The MACD line (blue color) is currently above the MACD signal line (orange color) in the weekly chart as well. This indicates a possible bullish bias.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, the ideal buy level for VOD is above the price of $17.60.
TP: Our target prices are $21 and $27 in the next 3-6 months.
SL: To limit risk, place a stop loss at $15.60. Note that the stop loss is on a closing basis.
Our target potential upside is almost 19% to 53% in the next 3-6 months.
For a risk of $2.00, our target rewards are $3.40 and $9.30. This is a 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 falling wedge 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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