$KC has been consolidating since its IPO launch earlier this year, but this hot growth stock is now ready to break out to a fresh all-time high. Here’s the technical trade setup…
Today on the Morpheus blog, we are sharing a special, bonus stock pick that was posted for Wagner Daily subscribers last night.
Kingsoft Cloud ($KC) is a recent Nasdaq IPO that provides cloud computing services to businesses and organizations across China.
$KC closed at $23.84 on its first day of trading (May 8, 2020), pulled back in the following days, then popped to a new high about six weeks later.
Kingsoft Cloud has been in consolidation mode since then, oscillating in a sideways range between the $28-$41 levels.
$KC has attempted to break out above the $41 area four different times since its IPO launch, but each attempt was followed by a sharp sell-off.
However, as shown below, the recent rally through $41 in late November has shown a change of character over the past two weeks:
Rather than immediately selling off after testing the $41 level, notice the price action tightened up this time and is holding above support of its rising 10-day exponential moving average.
The 20 and 50-day moving averages area also now trending higher, providing further support below the current price.
Volume has also declined during this tighter consolidation phase, which is another bullish signal.
Kingsoft Cloud lacks the strong earnings growth of most of our growth stock picks, but sales revenue has swelled by +56%, +60%, and +81% respectively over the last three quarters.
If $KC can break out above the high of its base, it will establish a new all-time high with no overhead resistance:
We are now stalking $KC for swing trade buy entry on a rally above the three-day high of $42.66.
Our exact buy trigger, stop, and target prices for this trade setup are also available to Wagner Daily subscribers in the “Watchlist” section of today’s report.
We also remain long Snowflake ($SNOW), which is now showing a gain of +57%, since our newsletter buy entry less than one month ago. Check out $SNOW IPO: How the Bullish Reversal Candlestick Pattern Led to a +33% Gain in 8 Days to see the original trade setup that led to this big winner.