The Los Angeles-based producer of plant-based meat substitutes, Beyond Meat Inc. (NASDAQ: BYND) shows signs of an upcoming price surge according to its latest charts.
#1 Downtrend Channel Breakout: The daily chart shows that the stock has been trading within a downward sloping trend channel for the past few months. This channel is marked in the daily chart in purple color. Currently, the stock has broken out of this channel, indicating that it has the potential to surge ahead.
#2 Above MAs: The stock is currently trading above its short-term moving average of 50-day SMA as well as the longer-term moving average of 200-day SMA, indicating the overall bullishness of the stock.
#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 Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30 in the daily chart. This indicates bullishness.
#6 Above Support Area: The weekly chart shows that the stock is currently above a resistance-turned-support area. This area is marked as a pink color dotted line. The price is also currently above the short-term moving average of 50-week SMA. This looks like a good area for the stock to bounce higher.
#7 Bullish Stoch: The %K line is currently above the %D line of the stochastic in the weekly chart. This usually indicates bullishness.
#8 Bullish MACD: In the weekly chart as well, the MACD line is currently above the MACD signal line. This is a possible bullish indication.
#9 Bullish ADX and DI: In the weekly chart as well, the ADX indicator shows bullishness, as the (+DI) line is currently trading above the (-DI) line.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, you can purchase the shares of BYND if it trades above yesterday’s close. This translates to a price of around $126.25.
TP: Our target prices are $135 and $150 in the next 3-6 months.
SL: To limit risk, place a stop loss at $120.50. Note that this stop loss is on a closing basis.
Our target potential upside is almost 7% to 19% in the next 3-6 months.
For a risk of $5.75, our target rewards are $8.75 and $23.75. 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 downtrend 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.
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