The real estate investment trust that invests in carrier-neutral data centers and provides colocation and peering services, CyrusOne Inc. (NASDAQ: CONE) seems to be poised for a price surge as per its latest charts.
Bullish Indications
#1 Trendline support: As you can see from the daily chart, the stock has been on an uptrend, as it has been forming higher highs and higher lows for the past several months. This trendline is shown in purple color in the daily chart below. The stock is currently moving up after taking support on the trendline. This is a possible bullish sign.
Daily Chart – CONE
#2 Price above MA: The daily chart shows that the stock is currently trading above its 50-day SMA. This is also a bullish sign.
#3 MACD above Signal Line: The daily chart shows that the MACD (light blue color) is currently above the MACD signal line (orange color).
This is a possible bullish indication.
#4 RSI Strong: Relative strength index (RSI) is currently moving up from oversold levels and nearing 50. This indicates the strength of the current upmove.
#5 Bullish Stoch: The %K line of the stochastic is above the %D line in the daily chart, indicating possible bullishness.
#6 Fibonacci Support: Usually, after an up-move, stocks retrace to any of the key Fibonacci levels before surging back again. CONE has currently taken support at 61.8% Fibonacci support level as seen in the weekly chart. So, this seems like a good support area for the stock to bounce upwards.
Weekly Chart – CONE
#7 RSI moving up: The RSI is nearing 50 and moving up on the weekly chart, indicating strength.
#8 Bullish Engulfing: The weekly chart shows that the latest candlestick pattern is a bullish engulfing pattern. This is marked as an orange ellipse in the chart. This is a bullish pattern and indicates that the price may move higher in the short term.
#9 Bullish Stoch: The %K line of the stochastic is above the %D line in the weekly chart as well, indicating possible bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase shares of CONE if it trades above yesterday’s close. This translates to a price of around $65.15.
TP: Our target prices are $71 and $80 in the next 4 to 6 months.
SL: To limit risk, place the stop loss below $62.20. Note that 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 $2.95, our target rewards are $5.85 and $14.85. This is a 1:2 and 1:5 risk-reward trade.
In other words, this trade offers nearly 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 and trendline support with a 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.
Happy Trading!
Tara
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