The company that develops, manufactures, and supplies bioproduction tools for the cell and gene therapy industry, BioLife Solutions Inc. (NASDAQ: BLFS) seems to be gearing up for a surge as per its latest charts.
Bullish Indications
#1 Ascending Triangle Pattern Breakout: The daily chart shows that the stock was recently forming an Ascending Triangle pattern. An Ascending Triangle pattern is a bullish pattern. This is marked on the daily chart in purple color lines. A breakout from an ascending triangle pattern generally indicates the start of a bullish trend. The breakout level also acts as a good support level. Currently, the stock has broken out of the ascending triangle pattern, which is usually a bullish sign.
Daily Chart – BLFS
#2 Trading Above MAs: The stock is currently trading above its 50-day as well as 200-day SMA, which implies that the bulls are currently in control.
#3 Bullish Stoch: The %K line of the stochastic is currently above the %D line, indicating bullishness.
#4 Bullish ADX and DI: The ADX line is starting to move up from below –DI and +DI lines. The +DI line and the ADX lines are also currently above –DI line. All these indicate 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 MACD above signal line: As you can see from the weekly chart, the MACD line (blue color) is currently above the signal line (orange color). The stock is also trading above its 50-day as well as 200-day SMA. These are all bullish indications.
Weekly Chart – BLFS
#7 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30 in the weekly chart as well. This indicates possible bullishness.
#8 Bullish ADX and DI: In the weekly chart as well, the +DI line is above the -DI line, and the ADX line has started to move higher from below the +DI and -DI lines. All these are possible bullish indications.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase the shares of BLFS if it trades above the price of $20.00.
TP: Our target prices are $25 and $30 in the near-term.
SL: To limit risk, place a stop loss near $16.60. Note that this stop loss is on a closing basis.
Our target potential upside is 25% to 50% in the next 3-6 months.
For a risk of $3.40, the target rewards are $5.00 and $10.00. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers nearly 2x to 3x 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
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