Relmada Therapeutics Inc. (NASDAQ: RLMD) seems to be poised for a price surge as per its latest charts. Relmada is a clinical-stage biotechnology company that focuses on developing various products for the treatment of central nervous system (CNS) diseases and other disorders.
Bullish Indications
#1 Double Bottom Pattern Breakout: As you can see from the daily chart below, the stock had recently broken out of a double bottom pattern. This pattern is marked in purple color. A double bottom pattern is a bullish reversal pattern, and a breakout from it indicates that the stock could move upwards. The stock is currently moving higher after taking support at the breakout level of the double bottom pattern.
RLMD – Daily Chart
#2 Price above MAs: The price is currently above the short-term moving average of 50-day SMA as well as the longer-term moving average of 200-day SMA, indicating that the bulls are still in control. This is a positive indication.
#3 Bullish Stoch: The %K line is above the %D line of the stochastic in the daily chart, indicating possible bullishness.
#4 Bullish RSI: The RSI is currently nearing 50 and moving higher, which is a possible bullish sign.
#5 Downtrend Channel Breakout: As you can see from the weekly chart, the stock has been trading within a downtrend channel for the past several months. This is marked in the chart in pink color lines. the stock has currently broken out of the trend channel. Once a stock breaks out from a channel, it has the potential to move further up. The stock is also trading above its 50-week and 200-week SMA, indicating that the bulls are still in control.
RLMD – Weekly Chart
#6 Bullish MACD: The MACD line is above the MACD signal line in the weekly chart, indicating bullishness.
#7 Bullish RSI: In the weekly chart, the RSI is currently above 50 and moving higher. This is a possible bullish sign.
#8 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 UNP above the price of around $25.50.
TP: Our target prices are $31 and $35 in the next 3-6 months.
SL: To limit risk, place stop-loss at $22.50. Note that the stop-loss is on a closing basis.
Our target potential upside is 22% to 37% in the next 3 to 6 months.
For a risk of $3.00, our target rewards are $5.50 and $9.50. 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 trend channel 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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