Alnylam Pharmaceuticals, Inc. (NASDAQ: ALNY) seems to be poised for a price surge as per its latest charts. The company focuses on discovering, developing, and commercializing novel therapeutics based on ribonucleic acid interference. The company’s pipeline of investigational RNAi therapeutics focuses on genetic medicines, cardio-metabolic diseases, hepatic infectious diseases, and central nervous system (CNS)/ocular diseases.
#1 Consolidation area: The daily chart shows that the stock has been consolidating within a price range for the past few days. This area is marked as a purple color rectangle. The stock now looks poised for a breakout from this consolidation area. The breakout level of this consolidation area typically acts as a good support level.
#2 Price above MAs: The price is currently above the short-term moving average of 50-day SMA as well as the longer-term moving average of 200-day SMA, indicating that the bulls are firmly in 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 the –DI and +DI lines. This indicates possible bullishness.
#4 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.
#5 Rising OBV: The daily chart shows that the OBV indicator is currently rising. OBV rises when volume on up days outpaces volume on down days. A rising OBV typically reflects positive volume pressure that can lead to higher prices.
#6 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. The stock is also trading above its 50-week and 200-week SMA, indicating that the bulls are still in control.
#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, indicating bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase shares of ALNY above the price of around $213.30.
TP: Our target prices are $224 and $235 in the next 3-6 months.
SL: To limit risk, place stop-loss at $207. Note that the stop-loss is on a closing basis.
Our target potential upside is 5% to 10% in the next 3 to 6 months.
For a risk of $6.30, our target rewards are $10.70 and $21.70. 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 consolidation area 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.
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