The public utility holding company that incorporated in Madison, Wisconsin, Alliant Energy Corporation (NASDAQ: LNT) seems to be getting ready for a price bump as per the latest charts.
Bullish Move – Chart Indications
#1 Falling Wedge Breakout: As you can see from the daily chart, the stock had formed a falling wedge pattern during the past few weeks. This is marked as purple color lines. The stock has currently broken out of the falling wedge pattern after taking support at the bottom of the wedge. A falling wedge is a bullish pattern and a breakout from it implies that the stock may move higher in the short term.
#2 Bullish MACD: In the daily chart, the MACD line (light blue color) is currently above the MACD signal line (orange color) which is typically considered as a potential buy signal.
#4 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30.
This indicates bullishness.
#5 Above Resistance Level: The daily chart shows that the stock is currently trading above a resistance area, indicating possible bullishness.
#6 Bullish Stochastic: The %K line is above the %D line in the stochastic of the weekly chart, indicating bullishness.
#7 Strong RSI: The RSI is above 50 and moving up, indicating strength.
#8 Above consolidation area: The weekly chart shows that the stock is trading above the consolidation area (marked in green color rectangle). This is a possible bullish sign.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase the shares of the LNT if it corrects to the resistance area of around $44.
TP: Our target prices are $48 and $54 in the next 4-6 months.
SL: To limit risk, place a stop loss below $42. Note that the stop loss is on a closing basis.
Our target potential upside is 9% to 23% in the next 4-6 months. For a risk of $2, our first target reward is $4 and the second target reward is $10. This is a nearly 1:2 and 1:5 risk-reward trade.
In other words, this trade offers 2x to 5x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the falling wedge pattern with 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.
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