The biopharmaceutical company that focuses on the development and commercialization of immunotherapies and other cancer-targeting biologics, Celldex Therapeutics, Inc. (NASDAQ: CLDX) seems to be ready for a price surge in the near-term.
Bullish Indications
#1 Flag Pattern Breakout: As you can see from the daily chart, the stock was in an uptrend after which it started consolidating and was in a narrow range. This is a classic flag pattern and is marked in the chart in purple color. A Flag is a continuation pattern. Whenever a stock breaks out of the flag pattern, it typically continues its previous trend (uptrend in this case). Currently, the stock has broken out of the flag pattern, which is a possible bullish sign.
Daily Chart – CLDX
#2 MACD above Signal Line: The daily chart shows that the MACD line (blue color) is above the MACD signal line (orange color). The MACD indicator is also moving up from oversold levels. This is a possible bullish setup.
#3 Above MAs: The stock is currently trading above its 50-day as well as 200-day SMA, indicating that the bulls are currently in control.
#4 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.
#5 Bullish Stochastic: The %K line is currently above the %D line in the stochastic. This indicates possible bullishness.
#6 Gap Support: The weekly chart shows that there is a gap support close-by for the stock. This is marked as an orange color dotted line. This seems like a good level for the stock to move higher.
Weekly Chart – CLDX
#7 Above MA: The stock is currently trading above its 50-week SMA, indicating possible bullishness.
#8 Bullish ADX and DI: The ADX indicator in the weekly chart shows bullishness because (+DI) is greater than (-DI), and the ADX line is currently above the (+DI) and (-DI) lines.
#9 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 a possible bullish sign.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase the shares of CLDX at above the price of $16.00
TP: Our target prices are $20 and $25 in the next 3-6 months.
SL: To limit risk, place a stop loss at $13.40. Note that this stop loss is on a closing basis.
Our target potential upside is nearly 25% to 56% in the next 3-6 months.
For a risk of $2.60, our first target reward is $4.00 and the second target reward is $9.00. 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 from the flag pattern breakout level. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any new government rules or regulatory changes in its sector.
Happy Trading!
— Tara
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