Bellring Brands Inc. (NYSE: BRBR) seems to be poised for a price surge as per its latest charts. BellRing Brands, Inc. engages in the provision of various nutrition products in the United States and internationally. It offers ready-to-drink shake and powder protein products primarily under the Premier Protein and Dymatize brands.
Bullish Indications
#1 Symmetrical Triangle Pattern: The daily chart shows that the stock has been forming a Symmetrical Triangle pattern. This is a continuation pattern and is characterized by two converging trend lines connecting a series of sequential peaks and troughs. This pattern is marked on the daily chart as orange color lines. The breakout from a symmetrical triangle pattern usually signifies a bullish move. Currently, the stock looks poised for a breakout from the symmetrical triangle pattern.
BRBR – Daily Chart
#2 Bullish RSI: The RSI is currently nearing 50 and moving higher, indicating the strength of the current upmove.
#3 Bullish TRIX: The TRIX indicator shows bullishness as the TRIX line has crossed above the zero line.
#4 Fibonacci Support: Usually, after an up-move, stocks typically retrace to any of the key Fibonacci levels before surging back again. The weekly chart shows that the stock had taken support at the 38.20% Fibonacci support level before moving higher. This indicates bullishness.
BRBR – Weekly Chart
#5 Bullish MACD: The MACD line is above the MACD signal line in the weekly chart, indicating bullishness.
#6 Bullish RSI: In the weekly chart as well, the RSI is currently nearing 50 and moving higher. This is a possible bullish sign.
#7 Bullish ADX: The ADX indicator shows that the +DI line is currently above the –DI line and the ADX line has started to move up from below –DI and +DI lines. This indicates possible bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase the shares of BRBR above the price of around $27.70. However, those with a higher risk appetite can purchase half the intended quantity of shares of BRBR above the price of around $26.20.
TP: Our target prices are $32 and $36 in the next 3-6 months.
SL: To limit risk, place stop-loss at $25.00 (for entry near $27.70) and $23.00 (for entry near $26.20). Note that the stop-loss is on a closing basis.
Our target potential upside is 15% to 37% in the next 3 to 6 months.
- Entry near $27.70: For a risk of $2.70, our target rewards are $4.30 and $8.30. This is a nearly 1:2 and 1:3 risk-reward trade.
- Entry near $26.20: For a risk of $3.20, our target rewards are $5.80 and $9.80. This is a nearly 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 from the symmetrical triangle 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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