The premier financial services company providing retail and commercial banking; trust administration and wealth management; and insurance and risk management solutions, Bryn Mawr Bank Corp. (NASDAQ: BMTC) shows signs of an upcoming price surge according to its latest charts.
Bullish Indications
#1 Channel Breakout: The daily chart of BMTC shows that the stock has been trading within a downtrend channel for the past few months. This channel is marked in the daily chart in purple color. Currently, the stock has broken out of this channel, indicating that it has the potential to surge ahead.
Daily Chart – BMTC
#2 MACD above Signal Line: As you can see from the daily chart, the MACD line (blue color) is currently above the signal line (orange color). This indicates a possible bullish bias.
[hana-code-insert name=’adsense-article’ /]#3 Above MAs: The stock is currently trading above both 50-day and 200-day SMA, indicating the overall bullishness of the stock.
#4 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30 in the daily chart.
This indicates possible bullishness.
#5 Strong Stoch: The stochastic is currently moving up and the %K line is currently above the %D line.
This usually indicates bullishness.
#6 Fibonacci Support: The weekly chart shows that the stock was on an uptrend after which it has been correcting. It is now moving up after taking support near the 38.2% Fibonacci retracement level of this move. Usually, after an up-move, stocks retrace to any of the key Fibonacci levels before resuming its upmove. So, this 38.2% retracement level seems like a good support area.
Weekly Chart – BMTC
#7 Double Bottom Pattern: In the weekly chart of BMTC, we can see that the stock is forming a double bottom pattern. This pattern is marked in the chart in orange color. A double bottom pattern is a strong bullish pattern and indicates that the stock may move higher in the short term.
#8 Strong RSI: The RSI is currently above 50 and moving up in the weekly chart, indicating the strength of the current upmove.
#9 Bullish MACD: The MACD line is above the signal line in the weekly chart as well, indicating a possible bullish bias.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, you can purchase the shares of BMTC at the current price of $37.26.
TP: Our target prices are $45 and $50 in the next 3-6 months.
SL: To limit risk, place a stop loss at $33.60. Note that this stop loss is on a closing basis.
Our target potential upside is almost 21% to 34% in the next 3-6 months.
For a risk of $3.66, our target rewards are $7.74 and $12.74. This is almost 1:2 and 1:4 risk-reward trade.
In other words, this trade offers 2x to 4x rewards when compared to risks.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the 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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