The US-based software company that provides a software platform for data engineering, data warehousing, machine learning, and analytics that runs in the cloud or on-premises, Cloudera Inc. (NYSE: CLDR) seems to be poised for a price surge as per its latest charts.
#1 Symmetrical Triangle Pattern Breakout: The daily chart shows that the stock was forming a symmetrical triangle pattern. This pattern is shown as purple 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 and moved higher, which is a possible bullish sign.
#2 Price above MAs: The price is currently above the short-term moving average of 50-day SMA as well as the longer-term moving average of 200-day SMA. The stock is also trading above a long-term resistance level which is marked in pink color dotted lines. All these are possible bullish indications.
#4 MACD above Signal Line: The MACD (light blue color) is currently above the MACD signal line (orange color) in the daily chart. This typically indicates a bullish setup.
#5 Bullish ADX and DI: The ADX indicator shows bullishness because (+DI) is greater than (-DI), ADX and (+DI) lines are above (-DI), and ADX has moved up from below (-DI).
#6 Downtrend Broken: The weekly chart shows that the stock has currently broken out of the prevailing downtrend. The downtrend line is shown in pink color. This is a possible bullish indication.
#7 Bullish ADX and DI: In the weekly chart as well, ADX indicator shows bullishness because (+DI) is greater than (-DI), ADX and (+DI) lines are above (-DI), and ADX has moved up from below (-DI).
#8 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart, indicating possible bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for CLDR is if it trades above yesterday’s close. This translates to a price of around $12.60.
TP: Our target prices are $16 and $20 in the next 4-6 months.
SL: To limit risk, place stop-loss at $10.50. Note that the stop-loss is on a closing basis.
Our target potential upside is 27% to 59% in the next 4 to 6 months.
For a risk of $2.10, our target rewards are $3.40 and $7.40. This is a nearly 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 from the resistance-turned-support area 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.
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