The American-Israeli multinational provider of software and combined hardware and software products for IT security, including network security, endpoint security, cloud security, mobile security, data security, and security management, Check Point Software Technologies Ltd. (NASDAQ: CHKP) shows signs of an upcoming price surge according to its latest charts.
Bullish Indications
#1 Symmetrical Triangle Pattern Breakout: As you can see from the daily chart, the stock had recently formed a symmetrical triangle pattern. This pattern is shown as purple lines. A symmetrical triangle pattern represents a period of consolidation before the price breaks out. This is typically formed when there is indecision in the price movements and uncertainty among the buyers and sellers. Once a breakout from the upper line occurs, it usually signifies the start of a new bullish trend. Currently, the stock has broken out of the symmetrical triangle pattern, indicating possible bullishness.
Daily Chart – CHKP
#2 Trading Above MAs: The stock is currently trading above both its 50-day and 200-day SMA, which implies that the bulls are currently in control.
#3 MACD Above Signal Line: In the daily chart, the MACD line (light blue color) is currently above the MACD signal line (orange color) which is typically considered bullish.
#4 Bullish Stoch: The %K line is above the %D line of the stochastic in the daily chart, indicating possible bullishness.
#5 Bullish ADX: The ADX line has started to move up from below –DI and +DI lines. The +DI and the ADX lines are also currently above the –DI line. This indicates possible bullishness.
#6 Fibonacci Support: Usually, after an up-move, stocks retrace to any of the key Fibonacci levels before surging back again. The stock had taken support at the 50% Fibonacci support level of the upmove before moving higher, as seen in the weekly chart. This is a possible bullish sign.
Weekly Chart – CHKP
#7 Bullish RSI: The RSI is currently above 50 and moving higher in the weekly chart, which is a possible bullish sign.
#8 MACD above Signal Line: The MACD line (blue color) is currently above the signal line (orange color) in the weekly chart as well, indicating possible bullishness.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, you can purchase the shares of CHKP above yesterday’s high. This translates to a price of around $124.60.
TP: Our target prices are $130 and $140 in the next 4-6 months.
SL: To limit risk, place a stop loss at $121.00. Note that this stop loss is on a closing basis.
Our target potential upside is almost 4% to 12% in the next 4-6 months.
For a risk of $3.60, our target rewards are $5.40 and $15.40. This is an almost 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 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
Legendary Stockpicker: "Buy this A.I. stock NOW" [sponsor]His award-winning system pinpointed NVDA and META before both stocks doubled. Now it's flashing "BUY" on this under-the-radar A.I. stock. MORE HERE...