The American public research, development and manufacturing company established as a spin-off from Hewlett-Packard, Agilent Technologies Inc. (NYSE: A) seems to be ready for a price surge according to its latest charts.
Bullish Indications
#1 Descending Triangle Pattern Breakout: The stock’s daily chart shows that it has recently broken out of a descending triangle pattern in an upward direction. This descending triangle pattern is marked in pink color on the daily chart. An upward breakout from a bearish pattern like descending Triangle is typically a good bullish sign.
#2 Price above MAs: The stock is currently trading above its 50-day as well as 200-day SMA. This shows that the bulls are currently in control.
[hana-code-insert name=’adsense-article’ /]#3 Bullish Aroon: The value of Aroon Up (orange line) is above 70, while Aroon Down (blue line) is below 30.
This indicates possible bullishness.
#4 Bullish RSI: The RSI is currently above 50 and moving up, indicating possible bullishness.
#5 Double Bottom Pattern: From the weekly chart, we can see that the stock had formed a double bottom pattern.
This pattern is marked in orange color in the chart.
A double bottom pattern is a strong bullish pattern. A breakout from the pattern usually foretells the possibility of an upmove in the short term. Currently, the stock has broken out of the double bottom pattern which is a possible bullish sign.
#6 %K above %D: The stochastics reveal that the %K line is currently above the %D line in the weekly chart. This is a possible bullish sign.
#7 Bullish MACD: The MACD line (blue color) is currently above the MACD signal line (orange color) in the weekly chart. This indicates a possible bullish bias.
#8 Near Support Level: The weekly chart shows that the stock has currently moved up from a strong support level. This support level is marked as a pink dotted line in the weekly chart. This seems like a good area for the stock to bounce upwards.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, the ideal buy level for Agilent is above the resistance level of $78.30.
TP: Our target prices are $85 and $95 in the next 3-6 months.
SL: To limit risk, place a stop loss at $73.90. Note that the stop loss is on a closing basis.
Our target potential upside is almost 9% to 21% in the next 3-6 months.
For a risk of $4.40, our target rewards are $6.70 and $16.70. This is a 1:2 and 1:4 risk-reward trade.
In other words, this trade offers nearly 2x to 4x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the breakout level of the descending 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 the sector.
Happy trading!
Tara
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