Shares of Stereotaxis Inc. (NYSE:STXS) have simply been on fire since the stock bottomed out in the first half of 2018. Even with a recent pullback pulling the average down a bit, shares are still in a long-term uptrend, advancing by a whopping 642.7% since those lows.
Looking forward, as mentioned, the trend is still intact, and bullish momentum continues to be strong so we don't see any reason why this stock can't continue its epic rally in the short and even medium-term.
Looking at the stock chart, shares of STX gained 1.33% in Friday’s trading to close at $3.81 on strengthening volume. This is important, because the stock is currently pinned just underneath a key resistance level ($3.80 - $3.90). If shares can break through this tough resistance. We see bullish momentum picking back up.
Looking higher up, more resistance looks likely up at $4.25 and $4.75. It’s that $4.75 level which would be our price target for this trade, as it was the level the stock topped out in mid-September. Shares have enough momentum to even break through that level, however we want to be conservative with this trade and exit at $4.74.
As for support, we would watch the $3.55 level as a near-term cushion. Not only is this a static support level, but also a dynamic support (upward trend line). Below that, further support would likely enter the picture around $3.25 - $3.30. Because of the dual supports at $3.55, we would not want to see this level broken to the downside and would opt for a stop loss at $3.49.
As we’ve discussed already, the key for this trade is a breakout of the key $3.80 - $3.90 resistance. As such, we would only enter this stock upon a break and close above $3.92, specifically on strong volume. If shares cannot hit our entry level, we would stay away from this trade altogether. Based on a $3.92 entry level, our upside potential looks to be 20.9% while our downside risk is limited to 11%.
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