United Bankshares, Inc. (NASDAQ: UBSI) seems to be poised for a price surge as per its latest charts. The company primarily provides commercial and retail banking products and services in the United States. It operates through two segments, Community Banking, and Mortgage Banking.
Bullish Indications
#1 Double Bottom Pattern: As you can see from the daily chart below, the stock had recently formed a double bottom pattern. This 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 currently looks poised for a breakout.
UBSI – 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 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.
#4 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 the –DI and +DI lines. This indicates possible bullishness.
#5 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.
#6 Above Support Area: As you can see from the weekly chart, the stock has currently moved up from a strong support area. This level is marked as a pink color dotted line. This looks like a good area for the stock to move higher.
UBSI – Weekly Chart
#7 %K above %D: The %K (blue) line of stochastic has currently crossed above the %D (Orange) line in the weekly chart. This is a possible bullish indication.
#8 Bullish MACD: The MACD line is above the MACD signal line in the weekly chart as well, indicating bullishness.
#9 Bullish RSI: In the weekly chart, the RSI is currently above 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 shares of UBSI above the price of around $34.00.
TP: Our target prices are $37 and $39 in the next 3-6 months.
SL: To limit risk, place stop-loss at $32.30. Note that the stop-loss is on a closing basis.
Our target potential upside is 9% to 15% in the next 3 to 6 months.
For a risk of $1.70, our target rewards are $3.00 and $5.00. 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 double bottom 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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