The medical technology company that focuses on the design, development, and commercialization of sacral neuromodulation solutions (SNM) solutions, Axonics Modulation Technologies Inc. (NASDAQ: AXNX) seems to be ready for a surge as per its latest charts.
Bullish Indications
#1 Ascending Triangle Pattern Breakout: AXNX’s daily chart shows that the stock had recently formed an Ascending Triangle pattern. An Ascending Triangle pattern is a bullish pattern and is marked on the daily chart in purple color. A breakout from a bullish pattern like this usually indicates the possibility of an upmove in the near-term. Currently, the stock has broken out of the ascending triangle pattern, indicating bullishness.
#2 Trading Above MAs: The stock is currently trading above both its short-term moving average of 50-day and the long-term moving average of 200-day SMA, which implies that the bulls are currently in control. This is a possible bullish sign.
#3 MACD Above Signal Line: In the daily chart, the MACD line (light blue color) is currently above the MACD signal line (orange color).
This is typically considered as a bullish signal.
#4 Bullish ADX: The ADX line is starting to move up from below –DI and +DI lines.
The +DI line is also currently above –DI line.
This indicates possible bullishness.
#5 Downtrend Broken: The weekly chart shows that the stock has currently broken out of a short-term downtrend. The downtrend line is marked in pink color in the weekly chart below. This is a possible bullish sign.
#6 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart, indicating possible bullishness.
#7 MACD Above Signal Line: In the weekly chart as well, the MACD line (light blue color) is currently above the MACD signal line (orange color). This is also 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 the shares of AXNX is if the stock corrects to the breakout level of ascending triangle pattern at around $30.00.
However, those with a higher risk appetite can purchase half the intended quantity of shares of AXNX if it trades above yesterday’s close at around $32.60.
TP: Our target prices are $40 and $45 based on the breakout from the Ascending Triangle pattern.
SL: To limit risk, place a stop loss near $27.80. Note that this stop loss is on a closing basis.
Our target potential upside is 23% to 50% in the next 3-5 months.
- Entry at $32.60: For a risk of $4.80, the target rewards are $7.40 and $12.40. This is a nearly 1:2 and 1:3 risk-reward trade.
- Entry at $30.00: For a risk of $2.20, the target rewards are $10.00 and $15.00. This is a nearly 1:5 and 1:7 risk-reward trade.
In other words, this trade offers nearly 2x to 7x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the ascending triangle 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 its sector.
Happy Trading!
Tara
Collect up to 5 dividend checks per week [sponsor]Hi, I'm Tim Plaehn, and I just did the math in my own, real-money portfolio. I'll be collecting 70 dividend checks this quarter. That's nearly 5 per week on average. Automatically… no trading, no options, no work. You don't need a lot of money. You can be retired or near retirement... Either way, I'll show you my #1 plan to quickly collect dividends like clockwork from high-quality, cash-flowing business. Click here to learn how to collect up to 5 dividends a week.