Lightwave Logic, Inc. (NASDAQ: LWLG) seems to be gearing up for a surge as per its latest charts. Lightwave Logic, Inc. focuses on the development of photonic devices and non-linear optical polymer materials systems for fiber-optic data communications and optical computing markets in the United States.
Bullish Indications
#1 Ascending triangle pattern Breakout: The daily chart shows that the stock has currently broken out of an Ascending Triangle pattern and moved higher. An Ascending Triangle pattern is a bullish pattern. This is marked on the daily chart in orange color. The breakout level of the ascending triangle pattern generally acts as a good support level.
LWLG – Daily Chart
#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 Bullish Stoch: The %K line is above the %D line of the stochastic in the daily chart, indicating possible bullishness.
#4 Bullish MACD: The MACD line (blue color) is above the MACD signal line (orange color) in the daily chart. This indicates bullishness.
#5 Bullish ADX and DI: The ADX line has moved up from below –DI and +DI lines. The +DI line and ADX line are also currently above the –DI line. This indicates possible bullishness.
#6 Unbroken Uptrend: The weekly chart shows that the stock’s uptrend is unbroken, as it has been forming higher highs and higher lows. This indicates bullishness. The stock is also trading above its 50-week as well as 200-week SMA. This indicates that the bulls are firmly in control.
LWLG – Weekly Chart
#7 MACD Above Signal Line: In the weekly chart, the MACD line (light blue color) is currently above the MACD signal line (orange color) which is typically considered bullish.
#8 Bullish ADX and DI: The weekly chart shows that the ADX line has moved higher from below the +DI and -DI lines. The +DI line and the ADX line are also currently above the -DI line. All these indicate possible bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level of LWLG is above the price of around $17.00.
TP: Our target prices are $20 and $22 in the next 2 to 6 months.
SL: To limit risk, place a stop loss at around $15.30. Note that this stop loss is on a closing basis.
Our target potential upside is 18% to 29% in the next 3-5 months.
For a risk of $1.70, the target rewards are $3.00 and $5.00. 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 ascending triangle breakout level. 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
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