Kenvue Inc. (NYSE: KVUE) seems to be poised for a price surge as per its latest charts. The company operates as a consumer health company worldwide. The company operates through three segments: Self Care, Skin Health and Beauty, and Essential Health.
The Self Care segment offers products under the Tylenol, Nicorette, and Zyrtec brands. The Skin Health and Beauty segment provides products under the Neutrogena, Aveeno, and OGX brand names. The Essential Health segment offers products under the Listerine, Johnson’s, Band-Aid, and Stayfree brands.
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 weeks. 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.
KVUE – 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 is above the %D line of the stochastic in the daily chart, indicating possible bullishness.
#4 Bullish RSI: The RSI is moving higher from oversold levels and is currently near 50, indicating bullishness.
#5 Above Support Area: As you can see from the weekly chart, the stock has currently moved up from a strong support level. This level is marked as a pink color dotted line. This looks like a good area for the stock to move higher.
KVUE – Weekly Chart
#6 Bullish ADX: The ADX indicator shows that the +DI line is currently above the –DI line and the ADX line has moved up from below the –DI and +DI lines. This indicates possible bullishness.
#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.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase shares of KVUE above the price of around $23.80.
TP: Our target prices are $25.00 and $25.70 in the next 3-6 months.
SL: To limit risk, place stop-loss at $23.20. Note that the stop-loss is on a closing basis.
Our target potential upside is 5% to 8% in the next 3 to 6 months.
For a risk of $0.60, our target rewards are $1.20 and $1.90. 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 breakout level of 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
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