The diversified financial services and consumer receivable asset management company headquartered in Englewood Cliffs, New Jersey, Asta Funding, Inc. (NASDAQ: ASFI) seems to be getting ready for a price bump as per the latest charts.
Bullish Move – Chart Indications
#1 Breakout from Consolidation Area: The daily chart shows that the stock has been trading within a range since the past several months. This indicates consolidation. The consolidation area is marked as a green color rectangle in the daily chart. A breakout from this consolidation area generally indicates bullishness.
Daily Chart – ASFI
#2 Above MAs: The stock is currently trading above its short-term moving average of 50-day SMA as well as the longer-term moving average of 200-day SMA. This indicates overall bullishness for the stock.
#3 MACD above Signal Line: In the daily chart, the MACD (light blue color) is currently above the MACD signal line (orange color).
This indicates a possible bullish setup.
#4 Bullish ADX and DI: The +DI line has currently crossed above the -DI line.
The ADX line is also currently above the –DI and +DI lines.
This indicates possible bullishness.
#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 Ascending Triangle Pattern Breakout: The weekly chart shows that the stock had broken out of an Ascending Triangle pattern. An Ascending Triangle pattern is a bullish pattern and is marked in the chart in pink lines. A breakout usually indicates the start of a bullish move. The stock is also trading above its 50-week as well as 200-week SMA, indicating that the bulls are currently in control.
Weekly Chart – ASFI
#7 Bullish Stoch: The %K line is currently above the %D line of the stochastic in the weekly chart. This usually indicates bullishness.
#8 Bullish RSI: The RSI is currently above 50 and moving higher. This is usually an indication of the strength of the current upmove.
#9 Bullish ADX and DI: The weekly chart also shows that the ADX and +DI lines are above the -DI lines, indicating bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase the shares of ASFI if it trades above Thursday’s close. This translates to a price of around $11.10.
TP: Our target prices are $14 and $17 in the next 3-5 months.
SL: To limit risk, place a stop loss near $9.10. Note that the stop loss is on a closing basis.
Our target potential upside is 26% to 53% in the next 3-6 months.
For a risk of $2.00, our first target reward is $2.90 and the second target reward is $5.90. 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 consolidation area 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
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.