Tara’s Breakout Stock Alert: Silk Road Medical (SILK)

The medical device company in the United States that offers ENROUTE Transcarotid Neuroprotection System, ENROUTE Transcarotid Stent System, ENHANCE Transcarotid Peripheral Access Kit etc, Silk Road Medical Inc. (NASDAQ: SILK) shows signs of an upcoming price surge according to its latest charts.

Bullish Indications

#1 Channel Breakout: The daily chart of SILK shows that the stock has been trading within a channel for the past few months. This channel is marked in the daily chart in pink color. Currently, the stock has broken out of this channel, indicating that it has the potential to surge ahead.

Daily Chart – SILK

#2 Above MA: The stock is currently trading above its 50-day SMA, indicating the overall bullishness of the stock.

#3 Bullish ADX: The ADX line is starting to move up from below –DI and +DI lines. The +DI line and the ADX line are also currently above –DI line. All these indicate possible bullishness.

#4 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.

#5 Bullish Stochastic: The %K (blue) line of stochastic is currently above the %D (Orange) line in the daily chart. This is a possible bullish indication.

#6 Symmetrical Triangle Pattern Breakout: The daily chart shows that the stock was forming a symmetrical triangle pattern. This pattern is shown as purple color dotted lines. A symmetrical triangle pattern represents a period of consolidation before the price breaks out. This is typically formed when there is indecision in the price movements and uncertainty among the buyers and sellers. Once a breakout from the upper line occurs, it usually signifies the start of a new bullish trend. Currently, the stock has broken out of the symmetrical triangle pattern, indicating possible bullishness.

#7 Above Support Area: The weekly chart shows that the stock is currently above a support area. This is marked as a green dotted line. This seems like a good area for the stock to bounce higher.

Weekly Chart – SILK

#8Bullish 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, the ideal buy level for SILK is above the resistance level of $40.

TP: Our target prices are $45 and $50 in the next 3-6 months.

SL: To limit risk, place a stop loss at $37.70. Note that this stop loss is on a closing basis.

Our target potential upside is almost 13% to 25% in the next 3-6 months.

For a risk of $2.30, our target rewards are $5.00 and $10.00. This is almost 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 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!


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