The Canada-based company that owns royalties and streams in gold mining and other commodity and natural resource investments, Franco Nevada Corp (NYSE: FNV) seems to be gearing up for a surge as per its latest charts.
Bullish Indications
#1 Ascending Triangle Pattern: The daily chart shows that the stock is currently forming an Ascending Triangle pattern. An Ascending Triangle pattern is a bullish pattern. This is marked on the daily chart in purple color. 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.
Daily Chart – FNV
#2 Trading Above MAs: The stock is currently trading above its short-term moving average of 50-day SMA as well as the long-term moving average of 200-day SMA, which implies that the bulls are currently in control.
#3 MACD above signal line: As you can see from the daily chart, the MACD line (blue color) is currently above the signal line (orange color), indicating a bullish bias.
#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 ADX and DI: The ADX indicator shows bullishness as the (+DI) line is currently above the (-DI) line and the ADX line is moving higher from below the (+DI) and (-DI) lines.
#6 Unbroken Uptrend: The weekly chart shows that the stock’s uptrend has been unbroken, as it has been forming higher highs and higher lows for the past several months. This uptrend line is marked in pink color in the weekly chart. The stock had recently taken support on this uptrend line and started moving higher again. This is a possible bullish sign.
Weekly Chart – FNV
#7 Bullish Stoch: The weekly chart shows that the %K line (blue color) of the stochastic indicator is currently above the %D line (orange color). This is a bullish indication.
#8 Price Above MAs: The stock is currently trading above both the 50-week as well as 200-week SMA. This indicates that the bulls are currently in control.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for FNV is above the price of around $155.30.
TP: Our target prices are $163 and $180 based on the breakout from the Ascending Triangle pattern.
SL: To limit risk, place a stop loss near $150.50. Note that this stop loss is on a closing basis.
Our target potential upside is 5% to 16% in the next 4-6 months.
For a risk of $4.80, the target rewards are $7.70 and $24.70. This is a nearly 1:2 and 1:5 risk-reward trade.
In other words, this trade offers nearly 2x to 5x 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
This is the #1 Stock to Buy for the AI Tidal Wave [sponsor]Marc Chaikin warned people about NVDA before its 2023 bull run - now he's naming his next pick or the AI tidal wave. Learn more here.