The clinical-stage pharmaceutical company focused on discovery and development of novel drugs for the treatment of cancer and other major diseases, Karyopharm Therapeutics Inc. (NASDAQ: KPTI) seems to be poised for a price surge as per its latest charts.
#1 Descending Triangle Breakout: The stock’s daily chart shows that it has recently broken out of a descending triangle pattern in an upward direction. This is marked on the daily chart in orange color. The upward breakout from a bearish pattern like descending Triangle is a good bullish sign.
#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), indicating a bullish bias.
There is also a long-term support level (marked as a green dotted line) close-by.
The stock has also taken support at the bottom of an uptrend channel (marked as purple lines).
All of these act as good support levels.
#4 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is moving to go below 30.
This indicates bullishness.
#5 Bullish Stochastic: The stochastic shows that %K is above the %D line. This indicates bullishness.
#6 Breakout from Pennant Pattern: In the weekly chart, the stock was in an uptrend after which it was in a consolidation phase with a narrowing range. This is a classic pennant pattern, which is marked as pink lines in the weekly chart. Currently, KPTI has broken out of the pennant pattern and is continuing its uptrend. The breakout from a continuation pattern like the pennant pattern indicates that the stock may move higher.
#7 %K above %D: The stochastics show that the %K line is currently above the %D line in the weekly chart. This is a bullish sign.
#8 Bullish CCI: In the weekly chart, CCI is moving up from oversold levels. This is a bullish sign.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, the ideal buy level is at the current price of $20.05.
TP: Our target prices are $25 and $30 in the next 3-6 months.
SL: To limit risk, place a stop loss at $17.50. Note that the stop loss is on a closing basis.
Our target potential upside is almost 25% to 50% in the next 3-6 months. For a risk of $2.55, our target rewards are $4.95 and $9.95. 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 support level. 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.
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