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Airplane manufacturer, Spirit AeroSystems Holdings (SPR), is set to report earnings Friday, April 29. Shares set new highs in July 2015 at $56.98, and many are wondering if SPR can climb back to a cruising altitude of those levels.
Profit Scanner powered by Recognia spotted a technical pattern on SPR’s chart that suggests it will climb in the short term. On April 27, Profit Scanner identified a bullish Ascending Continuation Triangle on the chart that could take SPR some 7% higher in less than a month.
The Ascending Continuation Triangle pattern tells traders that Spirit AeroSystems’ increasingly higher lows and constant highs within the pattern indicate that buyers are more aggressive than sellers. This sentiment is confirmed by a breakout through a resistance level to signal a continuation of the prior uptrend.
An Ascending Continuation Triangle pattern typically forms because a supply of shares is available at a certain price, represented by the upper flat line. When the supply depletes, the shares quickly break out from the top trendline and move higher.
The short-term target for SPR is $52.25 – $53.25, and the pattern is expected to play out within 20 trading days.
Profit Scanner indicates that there is support for SPR shares at $46.05, and resistance doesn’t occur until $56.04, more than $5 away from current levels.
Still, with the headline risk associated with earnings, prudent traders may wish to use the “medium” stop loss that Profit Scanner provides to exit if SPR trades below $43.33, as that may indicate the Ascending Continuation Triangle pattern has been invalidated.
Profit Scanner powered by Recognia can help traders of all levels uncover these signals to determine the best timing to buy. Or use Profit Scanner’s technical insight to validate your own trading ideas. See how easy this powerful tool is to help you uncover hidden opportunities in the market.