The Maryland-based company that researches, develops, manufactures and commercializes regenerative medicine products intended to improve the health and lives of patients and lower overall healthcare costs, Osiris Therapeutics, Inc. (NASDAQ: OSIR) seem to be gearing up for a surge as per its latest charts.
Bullish Indications
#1 Ascending triangle pattern breakout: The daily chart of OSIR shows that the stock had formed an Ascending Triangle pattern. An Ascending Triangle pattern is a bullish pattern. This is marked on the daily chart in purple color. The breakout from an ascending triangle pattern generally indicates the start of a bullish trend. The breakout level also acts a good support level. The stock has currently broken out of the ascending triangle pattern, indicating bullishness.
Daily Chart – OSIR
#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.
[hana-code-insert name=’adsense-article’ /]#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 as a bullish bias.#4 %K above %D: The %K line of the stochastic is currently above the %D line, indicating bullishness.
#5 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30 in the daily as well as the weekly chart.
This indicates possible bullishness.
#6 New uptrend: The weekly chart shows that the stock is currently in a new uptrend.
This is marked in purple color line in the chart below. The stock is also above its 50-week and 200-week SMA. All these indicate bullishness.
Weekly Chart – OSIR
#7 Bullish MACD above Signal Line: In the weekly chart as well, the MACD line is above the MACD signal line which is a bullish signal.
#8 Bullish RSI moving up: In the weekly chart, the RSI is above 50 and moving upwards. This indicates possible bullishness.
#9 %K above %D: The %K line of the stochastic is currently above the %D line in the weekly chart as well, indicating possible bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase half the intended quantity of shares of OSIR at the current price of $13.54 and the rest if the stock corrects to the breakout level of the ascending triangle pattern at around $12.
TP: Our target prices are $18 and $25 based on the breakout from the Ascending Triangle pattern.
SL: To limit risk, place a stop loss near $10.40 (entry near $12) and $11.50 (entry near $13.54). Note that this stop loss is on a closing basis.
Our target potential upside is 33% to 108% in the next 4-6 months.
Entry at $12.00: For a risk of $1.60, the target rewards are $6.00 and $13.00. This is a nearly 1:4 and 1:8 risk-reward trade.
Entry at $13.54: For a risk of $2.04, the target rewards are $4.46 and $11.46. This is a nearly 1:2 and 1:6 risk-reward trade.
In other words, this trade offers nearly 2x to 8x 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
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