Greenhill & Co., Inc. (NYSE: GHL) seems to be poised for a price surge as per its latest charts. The company is an independent investment bank that provides financial and strategic advisory services to corporations, partnerships, institutional investors, and governments worldwide.
Bullish Indications
#1 Downtrend Channel Breakout: As you can see from the daily chart, the stock has been trading within a downtrend channel during the past few months. This is marked in the daily chart in purple color. Currently, the stock has broken out of the downtrend channel. Once the stock breaks out from a downtrend channel, it has the potential to move further up.
GHL – Daily Chart
#2 Price above MA: The price is currently above the short-term moving average of 50-day SMA. This is a possible bullish sign.
#3 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.
#4 MACD above Signal Line: The daily chart shows that the MACD (light blue color) is currently above the MACD signal line (orange color). This typically indicates a bullish setup.
#5 Bullish ADX and DI: The ADX indicator shows bullishness because (+DI) is greater than (-DI), ADX and (+DI) are above (-DI), and ADX has moved up from below both (+DI) and (-DI).
#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 pink color dotted line. This looks like a good area for the stock to move higher.
GHL – Weekly Chart
#7 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart, indicating possible bullishness.
#8 Bullish RSI: The RSI is currently moving up from oversold levels, indicating possible bullishness.
#9 Bullish MACD: The MACD (light blue color) is currently above the MACD signal line (orange color) in the weekly chart as well, indicating bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase the shares of GHL if it trades above the price of around $8.30.
TP: Our target prices are $10.40 and $12.00 in the next 4-6 months.
SL: To limit risk, place stop-loss at $7.20. Note that the stop-loss is on a closing basis.
Our target potential upside is 25% to 45% in the next 4 to 6 months.
For a risk of $1.10, our target rewards are $2.10 and $3.70. 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 downtrend channel breakout level 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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