HashiCorp Inc. (NASDAQ: HCP) seems to be poised for a price surge as per its latest charts. The company provides multi-cloud infrastructure automation solutions worldwide. The company offers Terraform, an infrastructure provisioning product; Vault, a secrets management, and data protection product; Consul, an application-centric networking automation; and Nomad, a scheduler and workload orchestrator.
Bullish Indications
#1 Falling Wedge Pattern: As you can see from the daily chart, the stock has been forming a falling wedge pattern for the past few weeks. These are marked as pink color lines. The stock currently looks poised for a breakout from the falling wedge pattern. A falling wedge is a bullish pattern and a breakout from it implies that the stock may move higher in the short term.
HCP – Daily Chart
#2 MACD Above Signal Line: In the daily chart, the MACD line (light blue color) is currently above the MACD signal line (orange color) which is typically considered bullish.
#3 Bullish Stoch: The %K line has crossed above the %D line of the stochastic in the daily chart, and is also moving higher from oversold levels, indicating possible bullishness.
#4 Bullish RSI: The RSI is currently near 50 and moving higher in the daily chart. This indicates possible bullishness.
#5 Above Support Area: As you can see from the weekly chart, the stock has currently moved up from a resistance-turned-support level. This level is marked as a purple dotted line. This looks like a good area for the stock to move higher.
HCP – Weekly Chart
#6 %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.
#7 Bullish MACD: The MACD line (blue color) is above the MACD signal line (orange color) in the weekly chart as well, indicating bullishness.
#8 Bullish RSI: In the weekly chart as well, 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 HCP above the price of around $28.80.
TP: Our target prices are $34.00 and $38.00 in the next 3-6 months.
SL: To limit risk, place stop-loss at $26.00. Note that the stop-loss is on a closing basis.
Our target potential upside is 18% to 32% in the next 3 to 6 months.
For a risk of $2.80, our target rewards are $5.20 and $9.20. 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 falling wedge 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!
3 stocks to Change Your Life [sponsor]Brace yourself... because I'm about to flip everything you thought you know about dividend investing on its head. I'm going to show you how you can achieve 101% yields from dividends in just a few years. Best of all, it's as easy as buying 3 stocks and clicking a few buttons. And if you invest in these 3 stocks, you'll never have to worry about a bear market again. Folks it's time to take control of your retirement. Let me show you the way. Click here to discover how 20,000 other retirees are earning 101% yields from their dividends.