The bank holding company for ConnectOne Bank, a state chartered bank that provides various commercial banking products and services, ConnectOne Bancorp Inc. (NASDAQ: CNOB) seems to be ready for a surge as per its latest charts.
Bullish Indications
#1 Ascending Triangle Pattern: CNOB’s daily chart shows that the stock is currently forming an Ascending Triangle pattern. An Ascending Triangle pattern is a bullish pattern and is marked on the daily chart in purple color. A breakout from a bullish pattern like this usually indicates the possibility of an upmove in the near-term.
Daily Chart – CNOB
#2 Trading Above MAs: The stock is currently trading above both its shorter term moving average of 50-day and the longer term moving average of 200-day SMA, which implies that the bulls are currently in control. This is a possible bullish sign.
[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).
This is typically considered as a bullish signal.
#4 Bullish Stoch: The %K line is above the %D line of the stochastic, indicating possible bullishness.
#5 Downtrend Broken: The weekly chart shows that the stock has currently broken out of a short-term downtrend.
It has now started a new uptrend, as it is forming higher highs and higher lows.
The downtrend line is marked in purple color in the weekly chart below. This is a possible bullish sign.
Weekly Chart – CNOB
#6 Bullish RSI: The weekly chart shows that the RSI was oversold. However, it is currently above 50 and moving upwards. This indicates the strength of the current upmove.
#7 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart as well, indicating possible bullishness.
#8 MACD Above Signal Line: In the weekly chart as well, the MACD line (light blue color) is currently above the MACD signal line (orange color). This is also a possible bullish sign.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for the shares of CNOB is above the breakout level of the ascending triangle pattern at around $22.10.
TP: Our target prices are $26 and $32 based on the breakout from the Ascending Triangle pattern.
SL: To limit risk, place a stop loss near $19.90. Note that this stop loss is on a closing basis.
Our target potential upside is 18% to 45% in the next 3-5 months. For a risk of $2.20, the target rewards are $3.90 and $9.90. 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
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