The company that owns, operates, develops and acquires a wide range of domestic midstream infrastructure assets through three segments: Gathering Systems, Fresh Water Delivery, and Investments and Other, Noble Midstream Partners LP (NYSE: NBLX) seems to be getting ready for a price bump in the short-term as per the latest charts.
Bullish Move – Chart Indications
#1 Falling Wedge Pattern Breakout: As you can see from the daily chart of NBLX, the stock has been forming a falling wedge pattern for the past several weeks. It has typically taken support at the bottom of the wedge before bouncing back. The stock has currently broken out of the falling wedge pattern. A breakout from the wedge indicates that the stock may move higher.
Daily Chart – NBLX
#2 MACD above Signal Line: The daily chart shows that the MACD line (blue color) is currently above the MACD signal line (orange color). This is a possible bullish setup.
[hana-code-insert name=’adsense-article’ /]#3 Price above MA: The price is currently above the short-term moving average of 50-day SMA.
This usually implies a possible bullish bias for the stock.
#4 Bullish ADX and DI: The ADX indicator shows bullishness because (+DI) is greater than (-DI), ADX and (+DI) are above (-DI), and ADX is moving up from below (-DI) and (+DI).
#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 Downtrend Broken: The weekly chart shows that the stock has currently broken out of a downtrend. This downtrend line is marked in orange color. A breakout from a downtrend is a possible bullish sign.
Weekly Chart – NBLX
#7 MACD above Signal Line: In the weekly chart as well, the MACD (light blue color) is currently above the MACD signal line (orange color). This indicates a possible bullish setup.
#8 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart, indicating possible bullishness.
#9 RSI –Price Bullish Divergence: There is a bullish divergence between RSI and price in the weekly chart. While the price formed a lower low, the RSI formed to a higher low. This is marked as pink dotted lines. This is a possible bullish sign.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for NBLX is above the 200-day MA, which translates to a price of around $29.
TP: Our target prices are $35 and $40 in the next 3 to 6 months.
SL: To limit risk, place a stop loss at $25.40. Note that the stop loss is on a closing basis.
Our target potential upside is 21% to 38% in the next 3-6 months.
For a risk of $3.60, our first target reward is $6.00, and the second target reward is $11.00. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers 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 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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