The Westchester, Illinois based ingredient provider company that turns corn, tapioca, potatoes, and other vegetables and fruits into ingredients for the food, beverage, brewing, and pharmaceutical industries and numerous industrial sectors, Ingredion Inc. (NYSE: INGR) seems to be gearing up for a surge as per its latest charts.
#1 Symmetrical triangle pattern: INGR’s daily chart shows that the stock is currently forming a symmetrical Triangle pattern, which is a bullish pattern. This is marked on the daily chart in purple color. Once the stock breaks out from this pattern, it may move higher. The breakout level of the symmetrical triangle pattern generally acts as a good support level.
#2 Bullish RSI: The RSI is currently moving up and is nearing 50. This is a possible bullish sign.
This is marked in the daily chart in pink dotted lines.
Currently, the stock is near the top rail of the channel.
A breakout from the channel typically causes the stock to move higher.
#4 Consolidation Area: The weekly chart shows that the stock is currently consolidating near a strong support area.
This area is marked in a green color rectangle in the weekly chart below.
The stock had taken support near this area, forming long-tailed candles multiple times.
Once the stock breaks out from this consolidation area, it may move higher. This is because a breakout after a consolidation usually indicates that the stock has gained momentum.
#5 MACD Above Signal Line: In the weekly chart, the MACD line (light blue color) is currently above the MACD signal line (orange color) which is typically considered bullish.
#3 Oversold RSI moving up: The RSI is currently moving up from oversold levels. This indicates possible bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level of INGR is if the stock breaks out of the downtrend channel and symmetrical triangle pattern. This translates to a price of around $95.
TP: Our target prices are $100 and $105 based on the breakout from the Symmetrical Triangle pattern.
SL: To limit risk, place a stop loss near $93.30. Note that this stop loss is on a closing basis.
Our target potential upside is 5% to 11% in the next 3-5 months. For a risk of $1.70, the target rewards are $5.00 and $10.00. This is a nearly 1:3 and 1:6 risk-reward trade.
In other words, this trade offers nearly 3x to 6x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the symmetrical 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 its sector.