Farfetch Ltd (NYSE: FTCH) seems to be poised for a price surge as per its latest charts. The company is a British-Portuguese online luxury fashion retail platform that sells products from over 700 boutiques and brands from around the world.
Bullish Indications
#1 Downtrend Channel Breakout: As you can see from the daily chart, the stock has been trading within a downtrend channel for the past few months. This is marked in the daily chart in pink color. Currently, the stock has broken out of the downtrend channel with high volume. Once the stock breaks out from a downtrend channel, it has the potential to move further up.
FTCH – Daily Chart
#2 Price above MA: The price is currently above the short-term moving average of 50-day SMA, indicating that the bulls are gaining control. This is a positive indication.
#3 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.
#4 Bullish Stoch: The %K line is above the %D line of the stochastic in the daily chart, indicating possible bullishness.
#5 Bullish RSI: In the daily chart, the RSI is currently above 50 and moving higher. This is a possible bullish sign.
#6 Above Support Area: As you can see from the weekly chart, the stock has currently moved up from a support level. This level is marked as a purple dotted line. This looks like a good area for the stock to move higher.
FTCH – Weekly Chart
#7 %K above %D: The %K (blue) line of stochastic has currently crossed above the %D (Orange) line in the weekly chart as well. This is a possible bullish indication.
#8 MACD Above Signal Line: In the weekly chart, the MACD line (light blue color) is currently above the MACD signal line (orange color) which is typically considered bullish.
#9 Bullish RSI: In the weekly chart, the RSI is currently nearing 50 and moving higher. This is a possible bullish sign.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase the shares of FTCH above the price of around $9.90.
TP: Our target prices are $12 and $14 in the next 3-6 months.
SL: To limit risk, place stop-loss at $8.70. Note that the stop-loss is on a closing basis.
Our target potential upside is 21% to 41% in the next 3 to 6 months.
For a risk of $1.20, our target rewards are $2.10 and $4.10. 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
Legendary Stockpicker: "Buy this A.I. stock NOW" [sponsor]His award-winning system pinpointed NVDA and META before both stocks doubled. Now it's flashing "BUY" on this under-the-radar A.I. stock. MORE HERE...