The global company headquartered in the U.S. that offers various products and services, including weight loss and maintenance, fitness, and mindset such as the Weight Watchers comprehensive diet program, WW International Inc. (NASDAQ: WW) seems to be gearing up for a surge as per its latest charts.
Bullish Indications
#1 Symmetrical Triangle Pattern Breakout: The daily chart shows that the stock has currently broken out of a Symmetrical Triangle pattern with high volume. A symmetrical triangle is a continuation pattern and is characterized by two converging trendlines connecting a series of sequential peaks and troughs. This is marked on the daily chart as purple color lines. Once a stock breaks out from a symmetrical triangle pattern, it usually moves higher.
Daily Chart – WW
#2 Trading above MAs: The price is currently above its short-term moving average of 50-day SMA as well as the longer-term moving average of 200-day SMA. This implies a possible bullish bias for the stock.
#3 Bullish RSI: The RSI is currently above 50 and moving higher, indicating the strength of the current upmove.
#4 Bullish ADX and DI: The ADX line has started to move up from below –DI and +DI lines. The +DI line is also currently above the –DI line. This indicates possible bullishness.
#5 Bullish Stoch: The %K line (blue color) is currently above the %D line (orange color) of the stochastic in the daily chart, indicating possible bullishness.
#6 Downtrend Broken: The weekly chart shows that the stock had recently broken out of its downtrend and is currently moving higher. The downtrend line has been marked as a blue color line. This is a possible bullish sign.
Weekly Chart – WW
#7 Bullish MACD: The weekly chart shows that the MACD line (blue color) is currently above the MACD signal line (orange color). This is a possible bullish setup.
#8 Bullish ADX and DI: In the weekly chart as well, the +DI line is above the -DI line, which is a possible bullish sign.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for WW is above the near-term resistance area. This translates to a price of around $33.00.
TP: Our target prices are $40 and $45 in the next 2-4 months.
SL: To limit risk, place a stop loss at $28.25. Note that this stop loss is on a closing basis.
Our target potential upside is nearly 21% to 36% in the next 2-4 months.
For a risk of $4.75, the target rewards are $7.00 and $12.00. 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 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 its sector.
Happy Trading!
Tara