The leading provider of multiplex molecular diagnostic solutions designed to enhance patient care, improve key quality metrics, and reduce the total cost-of-care, GenMark Diagnostics, Inc. (NASDAQ: GNMK) seems poised for a price surge according to its latest charts.
Bullish Indications
#1 Double Bottom Pattern Breakout: The daily chart shows that the stock has currently broken out of a double bottom pattern. This is marked in pink color. A double bottom pattern is a strong bullish pattern and a breakout from it would indicate that the stock could surge higher.
Daily Chart – GNMK
#2 Above MAs: The stock price is currently above both 50-day as well as 200-day SMA. This is a possible bullish sign.
#3 Bullish ADX and DI: The ADX indicator shows bullishness because (+DI) is greater than (-DI), ADX and (+DI) are above (-DI), and ADX has risen higher from below both (+DI) and (-DI).
#4 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.
#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 Above resistance area: The daily chart shows that the stock has currently broken out of a resistance area. This level is marked as an orange dotted line. This seems like a good level for the stock to surge higher.
#7 Breakout from consolidation area: The weekly chart shows that the stock was trading within a range since the past several weeks. This indicates consolidation. The consolidation area is marked as a green color rectangle in the weekly chart. A breakout from this consolidation area generally indicates bullishness.
Weekly Chart – GNMK
#8 MACD above Signal Line: In the weekly chart as well, the MACD (light blue color) is currently above the MACD signal line (orange color), indicating bullishness.
#9 Bullish Stoch: The %K line is currently above the %D line of the stochastic in the weekly chart. This usually indicates bullishness.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, the ideal buy level for GNMK is between $8.00 to $9.00.
TP: Our target prices are $11 and $15 in the next 4-6 months.
SL: To limit risk, place a stop loss at $6.80. Note that this stop loss is on a closing basis.
Our target potential upside is 29% to 76% in the next 4-6 months.
Entry near $8.50: For a risk of $1.70, our target rewards are $2.50 and $6.50. This is a nearly 1:2 and 1:4 risk-reward trade.
In other words, this trade offers nearly 2x to 4x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the support area. 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