The Mississippi-based bank holding company that owns and operates Renasant Bank and Renasant Insurance, Inc., Renasant Corp. (NASDAQ: RNST) shows signs of an upcoming price surge according to its latest charts.
Bullish Indications
#1 Uptrend Channel Breakout: The daily chart of RNST shows that the stock was trading within an uptrend channel for the past several weeks. This channel is marked on the daily chart in orange color. There were multiple unsuccessful attempts done to break out of the channel during these weeks. Currently, the stock has broken out of the channel. This shows that the stock has gained momentum and has the potential to move further up.
Daily Chart – RNST
#2 Above MA: The stock is currently trading above both its 50-day and 200-day SMA. This shows that the bulls are currently in control.
[hana-code-insert name=’adsense-article’ /]#3 MACD Above Signal Line: The daily chart shows that the MACD line (blue color) has crossed above the signal line (orange color). This is a possible bullish setup.
#4 Breakout after Consolidation: The weekly chart of RNST shows that the stock was in a consolidation phase after a strong uptrend.
This consolidation phase was between the week ending December 12, 2016, and the week ending April 9, 2018.
It has been marked as a blue rectangle in the weekly chart.
The stock has now broken out of this consolidation phase and has started moving up. This is yet another bullish sign.
#5 Above MA: In the weekly chart of RNST, the stock is currently trading above both 50-week and 200-week SMA. This is a possible bullish sign.
Weekly Chart – RNST
#6 MACD above Signal Line: The weekly chart shows that the MACD line has moved above the signal line. This is also a possible bullish indicator.
Note: However, the daily and weekly chart of RNST shows that the RSI is currently near overbought levels. The CCI is also above +100 on both weekly and daily charts. All these points to a possible near-term decline in price before the next upmove.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, you can purchase shares of RNST if the stock corrects to the consolidation-breakout level of $44.00.
TP: Our target prices are $55 and $65 in the next 4-6 months.
SL: To limit risk, place a stop loss at $40.50. Note that this stop loss is on a closing basis.
Our target potential upside is almost 25% to 48% in the next 4-6 months.
For a risk of $3.5, our target rewards are $11.00 and $22.00. This is a 1:3 and 1:6 risk-reward trade.
In other words, this trade offers nearly 3x to 6x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the consolidation area and the uptrend channel. 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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