Westport Stock Is Setting Up for Another Leg Higher

Westport Stock
credits:istock.com/phongphan5922

WPRT Stock: The Golden Cross Rules the Day

I am focusing on Westport Fuel Systems Inc (NASDAQ: WPRT) stock because I have the inclination to believe that higher Westport stock prices are on the horizon. This bullish inclination toward this stock is based on the method of analysis known as technical analysis, which is based on using indicators generated on the company’s stock chart to gain a grasp of what the future may bring.

This is not my first time covering WPRT stock and I have been bullish on this stock since August 28, 2017, when an influential indicator on the company’s stock chart had suggested that a change in tide had taken place, insinuating that higher prices were likely to prevail.

This influential indicator is highlighted in the following stock chart.

Westport Price Chart

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Chart courtesy of StockCharts.com

This influential indicator highlighted on the WPRT stock chart is generated when the 50-day moving average (highlighted in blue) crosses the 200-day moving average (highlighted in red). There are two distinct indications that are generated when these moving averages cross: a golden cross and a death cross.

A golden cross is a bullish indication generated when the 50-day moving average crosses above the 200-day moving average and it implies that a bull market is in development.

A death cross is a bearish indication generated when the 50-day moving average crosses below the 200-day moving average and it implies that a bear market is in development.

In this case, this indication was significant and influential because ever since a death cross was created in October 2013, Westport stock shed 97.05% of its value as the share price fell from $27.75 to a low of $0.82.

Over the years, there were numerous attempts to undo the implications suggested by the death cross. Unfortunately, these attempts were thwarted on three different occasions. This all came to an end in June 2017 when a golden cross was finally generated. This feat indicated that the tide had finally changed, which meant that the bearish trend toward lower prices had finally concluded, and therefore, higher prices were likely to prevail.

This view was quickly vindicated because the Westport stock price has appreciated to the tune of 140.59% since the golden cross was generated.

As I stated earlier in this publication, I have reason to believe that further gains are on the horizon and they are based on the indications highlighted on the following stock chart.

Westport Stock Chart

Chart courtesy of StockCharts.com

Since bottoming earlier this year, WPRT stock has been in a bullish trend characterized by a price sequence containing higher highs and higher lows. This price sequence is the quintessential characteristic that defines a bullish trend and it’s responsible for creating a stair-step price pattern that moves the stock from the lower left to the upper right of the price chart. As long as Westport stock is characterized by such price action, higher prices will prevail.

I am currently watching an influential momentum indicator that will reinforce my inclination that higher stock prices are in development. This momentum indicator is highlighted in the lower panel and labeled “MACD.”

MACD—moving average convergence/divergence—is an indicator that determines whether bullish or bearish momentum is influencing the price action in a stock. This indicator is pertinent because a stock cannot stage a sustained decline or advance without the applicable momentum.

The MACD signal lines are currently converging and a bullish cross is likely to occur in the days ahead. A bullish MACD cross would suggest that bullish momentum is influencing the price action in Westport stock, paving the road toward higher prices.

Analyst Take:

I want to reiterate my bullish stance on Westport stock because I have the inclination to believe that higher prices are on the horizon. These beliefs are based on the indications that were generated on the WPRT stock chart. As a result, I will maintain this view until there are indications suggesting another view is warranted.