Karyopharm Therapeutics Inc. ( NASDAQ: KPTI) shows signs of an upcoming price surge according to its latest charts. Karyopharm Therapeutics Inc., a commercial-stage pharmaceutical company pioneering novel cancer therapies, discovers, develops, and commercializes drugs directed against nuclear export for the treatment of cancer and other diseases.
The stock was also a part of our recent watchlist.
Bullish Indications
#1 Symmetrical Triangle Pattern Breakout: As you can see from the daily chart, the stock had recently formed a symmetrical triangle pattern. This pattern is shown as purple color lines. A symmetrical triangle pattern represents a period of consolidation before the price breaks out. This is typically formed when there is indecision in the price movements and uncertainty among the buyers and sellers. Once a breakout from the upper line occurs, it usually signifies the start of a new bullish trend. Currently, the stock has broken out of the symmetrical triangle pattern, indicating possible bullishness.
KPTI – Daily Chart
#2 Price Above MAs: The stock is currently above the 50-day as well as 200-day SMA, indicating that the bulls are gaining control.
#3 MACD Above Signal Line: In the daily chart, the MACD line (light blue color) is currently above the MACD signal line (orange color) which is typically considered bullish.
#4 Bullish Stoch: The %K line (blue color) is above the %D line (orange color) of the stochastic in the daily chart, indicating possible bullishness.
#5 Bullish ADX and DI: The ADX indicator shows bullishness as the +DI line and ADX line are above the -DI line and the ADX line is moving higher from below the +DI and -DI line.
#6 Downtrend Broken: The weekly chart shows that the stock has broken out of a downtrend and is now moving higher. This is a bullish sign.
KPTI – Weekly Chart
#7 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.
#8 Bullish ADX and DI: In the weekly chart as well, the ADX indicator shows bullishness because the +DI is above the -DI line and the ADX line is currently moving higher from the +DI and -DI lines.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, the ideal buy level for KPTI is above the price of around $10.50.
TP: Our target prices are $13.50 and $16.00 in the next 4-6 months based on the breakout from the symmetrical triangle pattern.
SL: To limit risk, place a stop loss at $8.60. Note that this stop loss is on a closing basis.
Our target potential upside is almost 33% to 52% in the next 4-6 months.
For a risk of $1.90, our target rewards are $3.50 and $5.50. This is an almost 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 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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