SENS Stock: Prospects Look Bright Going Forward
The markets are really good at keeping sentiment contained. It seems that, just when the markets are going to make a sustained move toward higher prices, another shoe drops that causes the markets to endure another round of selling pressure.
From a headline perspective, this can be worrisome. But at this exact moment, I am not worried. I am focusing on the sectors currently leading the pack, which are the small-cap and technology stocks. These sectors have brushed aside all the negative rhetoric that is pressuring the markets, and they continue to push higher.
Sticking with this bullish theme, I am returning to focus on Senseonics Holdings Inc (NYSEAMERICAN:SENS).
I first focused on Senseonics stock on April 6, 2018, in a report titled “SENS Stock Is on the Verge of Breaking Out Toward Higher Prices.” The basis of that report was a technical price pattern that was approaching completion. I outlined a number of indications which were suggesting that this pattern was likely to be completed in the not-too-distant future.
So, it should come as no surprise that the reason I am returning to focus on this stock is that the technical price pattern has been completed, which suggests that much higher prices are likely to follow.
The pattern in question is highlighted on the following stock chart.
Chart courtesy of StockCharts.com
The technical price pattern highlighted on the above Senseonics stock chart is a cup and handle price pattern.
A cup and handle pattern is created when a significant level of price resistance prevents the stock price from advancing. This level of price resistance, which resided at $4.00, was responsible for creating two distinct troughs.
When identifying a cup and handle pattern, the first trough is always much larger than the second. It is the two troughs that characterize the cup and handle price pattern.
On June 14, the stock closed above resistance, completing the cup and handle price pattern. That event implied that higher stock prices were likely to follow.
The great thing about the cup and handle price pattern is that it not only suggests that higher SENS stock prices are likely, but it is courteous enough to supply a price objective.
This price objective is obtained by taking the depth of the cup and extrapolating its value above the significant level of price resistance that was responsible for creating the pattern. Applying this method suggests that $6.60 is a viable price objective for Senseonics stock.
What sets this pattern apart from typical cup and handle price patterns is that the significant level of price resistance was also the previous all-time high that was created shortly after the stock began trading on a public exchange.
This characteristic changes the dynamic quite considerably. When a stock breaks above a long-standing high, which was the last level of price resistance, the stock is free to appreciate. With nothing to prevent the stock price from advancing, the sky is truly the limit.
This characteristic is shared among some of the best-performing stocks. Once they took out that last level of price resistance, an epic move toward higher prices followed. To be honest, this characteristic is why I could easily see SENS stock surpass the $6.60 price objective that was outlined earlier.
It is fair to say that I am really excited about the prospects of Senseonics stock.
I am bullish on Senseonics stock because it has just completed a technical price pattern suggesting that much higher prices are on the horizon. I will maintain this bullish view on SENS stock as long as it maintains its footing above $4.00.