The bank holding company for Atlantic Capital Bank, N.A. that provides banking products and services in the Metropolitan Atlanta and rest of the United States, Atlantic Capital Bancshares Inc. (NASDAQ: ACBI) shows signs of an upcoming price surge according to its latest charts.
Bullish Indications
#1 Double Bottom Breakout: In the daily chart, we can see that the stock had recently broken out of a double bottom pattern. This pattern is marked in the chart in pink color. A double bottom pattern is a strong bullish pattern and a breakout from it indicates that the stock may move higher in the short term.
Daily Chart – ACBI
#2 MACD above Signal Line: As you can see from the daily chart, the MACD line (blue color) is currently above the signal line (orange color). This indicates a possible bullish bias.
#3 Above MAs: The stock is currently trading above both 50-day and 200-day SMA, indicating the overall bullishness of the stock.
#4 Bullish Stochastic: The %K (blue) line of stochastic is currently above the %D (Orange) line in the daily chart.
This is a possible bullish indication.
#5 Symmetrical Triangle Pattern Breakout: The weekly chart shows that the stock has been forming a symmetrical triangle pattern.
This pattern is shown as orange color lines.
A symmetrical triangle pattern represents a period of consolidation before the price breaks out. This is typically formed when there is indecision in the price movements and uncertainty among the buyers and sellers. Once a breakout from the upper line occurs, it usually signifies the start of a new bullish trend. Currently, the stock has broken out of the symmetrical triangle pattern, indicating possible bullishness.
Weekly Chart – ACBI
#6 Bullish Stoch: The %K line of the stochastic is above the %D line in the weekly chart as well, indicating a possible bullish bias.
#7 Bullish RSI: The weekly chart shows that RSI is currently above 50 and moving up. This indicates the strength of the current upmove.
#8 Price above MAs: In the weekly chart, the price is currently above the 50-week as well as 200-week SMA. This indicates possible bullishness.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, the ideal buy level for ACBI is above the resistance level of $19.10.
TP: Our target prices are $24 and $30 in the next 3-6 months.
SL: To limit risk, place a stop loss at $17.20. Note that this stop loss is on a closing basis.
Our target potential upside is almost 26% to 57% in the next 3-6 months.
For a risk of $1.90, our target rewards are $4.90 and $10.90. This is almost 1:3 and 1:6 risk-reward trade.
In other words, this trade offers nearly 3x 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 double bottom 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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