The global leader in consumer dispensing, active packaging and drug delivery solutions, AptarGroup, Inc. (NYSE: ATR) seems to be poised for a price surge according to its charts.
Bullish Indications
#1 Flag Pattern: As seen from the daily chart of ATR, the stock was in an uptrend after which it started consolidating and was in a narrow range. This is a classic flag pattern, which is a continuation pattern. The flag pattern is marked in purple color in the chart. Whenever a stock breaks out of the flag pattern, it typically continues its previous trend which is an uptrend in this case. Currently, the stock is moving up after taking support at the bottom rail of the flag.
Daily Chart – ATR
#2 MACD above Signal Line: In the daily chart, the MACD line (blue color) is currently above the signal line (orange color), indicating a bullish bias.
[hana-code-insert name=’adsense-article’ /]#3 Bullish Stoch: The %K line is above the %D line of the stochastic, indicating possible bullishness.
It is also moving up from oversold levels.
This points to the possibility of an upmove in the near-term.
#4 Fibonacci Support: As seen in the weekly chart, the stock was on an uptrend and has been correcting after forming a top.
Usually, after an up-move, stocks retrace to any of the key Fibonacci levels before resuming its upmove.
The stock had taken support at the 50% Fibonacci retracement level before surging back again. This seems like a good area for a bounceback.
Weekly Chart – ATR
#5 Uptrend Unbroken: As you can see from the weekly chart, the stock has been forming higher highs and higher lows for the past few weeks, indicating that the uptrend is still intact.
#6 Support area: There is a strong support level for the stock near-by, which is marked as an orange dotted line. Once crossed, this seems like a good area for the stock to bounce higher.
#7 Oversold RSI: In the weekly chart, the RSI is currently near oversold levels and starting to move up. This is a possible sign of an upcoming bullish reversal.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, the ideal buy level for ATR is above the gap resistance level of $115.00.
TP: Our target prices are $120 and $135 in the next 4-6 months.
SL: To limit risk, place a stop loss at $111.60. Note that this stop loss is on a closing basis.
Our target potential upside is almost 4% to 17% in the next 4-6 months.
For a risk of $3.40, our target rewards are $5.00 and $20.00. This is a 1:2 and 1:6 risk-reward trade.
In other words, this trade offers nearly 2x to 6x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the flag pattern. 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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