ImmunoGen, Inc. (NASDAQ: IMGN) shows signs of an upcoming price surge according to its latest charts. ImmunoGen, Inc. is a biotechnology company focused on the development of antibody-drug conjugate therapeutics for the treatment of cancer.
Bullish Indications
#1 Double Bottom Pattern Breakout: In the daily chart, we can see that the stock has currently broken out of a double bottom pattern. This pattern is marked in the chart in pink color. A double bottom pattern is a strong bullish pattern and indicates that the stock may move higher in the short term.
IMGN – Daily Chart
#2 Above MAs: The stock is currently trading above both 50-day and 200-day SMA, indicating the overall bullishness of the stock.
#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). This indicates a possible bullish bias.
#4 Bullish Stoch: The %K line of the stochastic is above the %D line. This indicates possible bullishness.
#5 Fibonacci Support: Usually, after an up-move, stocks retrace to any of the key Fibonacci levels before resuming its upmove. The stock had taken support at its 38.2% retracement level before moving higher to reach above the 50% Fibonacci level as seen in the weekly chart. This seems like a good support area for the stock. The stock is also above its 50-week SMA, indicating that the bulls are still in control.
IMGN – Weekly Chart
#6 Bullish ADX and DI: The ADX indicator shows bullishness because the (+DI) line is currently above the (-DI) line and the ADX line is starting to move higher from below the (+DI) and (-D) lines.
#7 Bullish Stoch: The %K line is currently above the %D line of the stochastic in the weekly chart as well. This usually indicates bullishness.
#8 Bullish MACD: The MACD line (blue color) is above the MACD signal line (orange color) in the weekly chart as well, indicating a possible bullish bias.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, the ideal buy level of IMGN is above a close of $7.40.
TP: Our target prices are $9.00 and $11.50 in the next 3-6 months.
SL: To limit risk, place a stop loss at $6.40. Note that this stop loss is on a closing basis.
Our target potential upside is almost 22% to 55% in the next 3-6 months.
For a risk of $1.00, our target rewards are $1.60 and $4.10. This is almost 1:2 and 1:4 risk-reward trade.
In other words, this trade offers nearly 2x to 4x rewards compared to the risks.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the double bottom 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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