Remitly Global, Inc. (NASDAQ: RELY) seems poised for a price surge based on its latest charts. The company engages in the provision of digital financial services in the United States, Canada, and internationally. It offers cross-border remittances and complementary financial services through mobile application and website.
Bullish Indications
#1 Falling Wedge Pattern Breakout: As you can see from the daily chart, the stock has been forming a falling wedge pattern for the past few weeks. These are marked as purple lines. The stock has currently broken out of the falling wedge pattern and looks poised for an upmove. A falling wedge is a bullish pattern, and a breakout from it implies that the stock may move higher in the short term.
RELY – Daily Chart
#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, indicating that the bulls are still in control. This is a positive indication.
#3 Bullish ADX: The ADX indicator shows that the +DI line is currently above the –DI line and the ADX line has started to move up from below the –DI and +DI lines. This indicates possible bullishness.
#4 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 possible bullishness.
#5 Above Support Area: As you can see from the weekly chart, the stock has currently moved up from a resistance-turned-support level. This level is marked as a pink dotted line. This looks like a good area for the stock to move higher. The stock is also trading above its 200-week SMA, indicating that the bulls are still in control.
RELY – Weekly Chart
#6 %K above %D: The %K (blue) line of stochastic has currently crossed above the %D (Orange) line in the weekly chart and is also moving higher from oversold levels. This is a possible bullish indication.
#7 Bullish MACD: The MACD line is above the MACD signal line in the weekly chart, indicating bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase shares of RELY above the price of around $17.85.
TP: Our target prices are $21.00 and $24.00 in the next 3-6 months.
SL: To limit risk, place a stop-loss at $16.00. Note that the stop-loss is on a closing basis.
Our target potential upside is 17% to 34% in the next 3 to 6 months.
For a risk of $1.85, our target rewards are $3.15 and $6.15. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers nearly 2x to 3x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the falling wedge pattern with 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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Source: Trades of the Day
