Huntington Bancshares Incorporated (NASDAQ: HBAN) seems to be poised for a price surge as per its latest charts. The company operates as the bank holding company for The Huntington National Bank which provides commercial, consumer, and mortgage banking services in the United States.
Bullish Indications
#1 Channel Breakout: As you can see from the weekly chart, the stock was trading within a downtrend channel during the past few months. This is marked in the chart in purple color. The stock has currently broken out of the downtrend channel and is moving higher. A breakout from the channel is usually a bullish sign.
HBAN – 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: The RSI is above 50 and moving higher, indicating bullishness.
#6 Flag Pattern Breakout: The weekly chart shows that the stock was in an uptrend after which it started consolidating and was in a narrow range. This is a classic flag pattern and is marked on the chart in pink color. Currently, the stock has broken out of the flag. A Flag is a continuation pattern. Whenever a stock breaks out of the flag pattern, it typically continues its previous trend (uptrend in this case). The stock is also trading above its 200-week SMA. All these are possible bullish indications.
HBAN – 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, and is also moving higher from oversold levels. This is a possible bullish indication.
#8 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30 in the weekly chart. 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 HBAN above the price of around $14.50.
TP: Our target prices are $17 and $20 in the next 3-6 months.
SL: To limit risk, place stop-loss at $13.00. Note that the stop-loss is on a closing basis.
Our target potential upside is 17% to 38% in the next 3 to 6 months.
For a risk of $1.50, our target rewards are $2.50 and $5.50. This is a nearly 1:2 and 1:4 risk-reward trade.
In other words, this trade offers nearly 2x to 4x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the breakout level of the flag 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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