The company that engages in the provision of a platform, which develops and deploys mission-critical business applications, Progress Software Corp (NASDAQ: PRGS) seems to be gearing up for a price surge according to its latest charts.
Bullish Indications
#1 Broken Downtrend: The daily chart shows that the stock has currently broken out of a downtrend. This downtrend line is marked in purple color. This is a possible bullish indication.
Daily Chart – PRGS
#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 Stoch: The %K line of the stochastic is currently above the %D line, indicating bullishness.
#4 MACD above Signal Line: The daily chart shows that the MACD line (blue color) is above the MACD signal line (orange color). This is a possible bullish setup.
#5 Bullish ADX and DI: The ADX indicator shows bullishness because (+DI) is greater than (-DI), ADX and (+DI) are above (-DI), and ADX has started to move higher from below both (+DI) and (-DI).
#6 Symmetrical Triangle Pattern Breakout: The weekly chart shows that a symmetrical triangle pattern was formed during the past several weeks. This is marked in pink color lines. This pattern is usually formed when there is an indecision in the price movements and uncertainty among the buyers and sellers. It represents a period of consolidation before the price breaks out or breaks down. Currently, the stock has broken out of the symmetrical triangle pattern. This usually signifies the start of a new bullish trend.
Weekly Chart – PRGS
#7 Double Bottom Pattern: The weekly chart shows that the stock is currently forming a double bottom pattern, which is shown in orange color. Once the stock breaks out from the double bottom pattern, it may move higher.
#8 Above MA: The stock is currently trading above its 50-week SMA, indicating that the bulls are still in control.
#9 Bullish RSI: The RSI is currently above 50 and moving higher, indicating the strength of the current upmove.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, the ideal buy level for PRGS is above the price of $39.50.
TP: Our first target price is $45 and the second target price is $50 in the next 4-6 months.
SL: To limit risk, place a stop loss at $36.00. Note that this stop loss is on a closing basis.
Our target potential upside is almost 14% to 27% in the next 4-6 months.
For a risk of $3.50, our first target reward is $5.50 and the second target reward is $10.50. This is a 1:2 and 1:3 risk-rewards 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 symmetrical 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 the sector.
Happy Trading!
— Tara
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