The Salem, New Hampshire-based industrial mold manufacturing company, Standex International Corp. (NYSE: SXI) seem to be poised for a price surge as per its latest charts.
Bullish Indications
#1 Trend Channel Breakout: As you can see from the daily chart, the stock has been trading within a downtrend channel during the past few months. This is marked in the daily chart in pink color lines. Currently, the stock has broken out of this downtrend channel. Once the stock breaks out from the channel, it has the potential to move further up.
Daily Chart – SXI
#2 Bullish Stoch: The %K line is above the %D line of the stochastic, indicating possible bullishness.
[hana-code-insert name=’adsense-article’ /]#3 MACD above Signal Line: The MACD (light blue color) is currently above the MACD signal line (orange color) in the daily chart.
This typically indicates a bullish setup.
#4 Bullish ADX and DI: The ADX indicator shows bullishness because (+DI) is greater than (-DI), ADX and (+DI) are above (-DI), and ADX is moving up from below (-DI) and (+DI).
#5 Downtrend Broken: The weekly chart shows that the stock has currently broken out of a short-term downtrend.
The downtrend line is marked in pink color. This is a possible bullish sign.
Weekly Chart – SXI
#6 Bullish RSI: In the weekly chart, the RSI is moving up from oversold levels. It has currently crossed above 50 and moving higher. This is a possible bullish sign.
#7 MACD Cross above Signal Line: The weekly chart of CNC shows that the MACD (light blue color) has currently crossed above the MACD signal line (orange color). This typically indicates a bullish setup.
#8 Bullish Stoch: The %K line is above the %D line of the stochastic 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, the ideal buy level for SXI is if it corrects to the breakout level of the channel at around $70. However, for those with a higher risk appetite, you can purchase half the intended quantity of shares of SXI at the current price of $75.56.
TP: Our target prices are $80 and $90 in the next 4-6 months.
SL: To limit risk, place stop-loss at $66.30 (for entry near $70) and $73.50 (for entry near $75.56). Note that the stop-loss is on a closing basis.
Our target potential upside is 6% to 29% in the next 4 to 6 months.
- Entry near $70: For a risk of $3.70, our target rewards are $10.00 and $20.00. This is a nearly 1:3 and 1:5 risk-reward trade.
- Entry near $75.56: For a risk of $2.06, our target rewards are $4.44 and $14.44. This is a nearly 1:2 and 1:7 risk-reward trade.
In other words, this trade offers nearly 2x to 7x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the downtrend channel breakout level with a high volume. 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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