Conclusion, Investment Implications, Strategy
Kforce Inc. (KFRC) is amid favorable conditions to resume its August 2020 major uptrend from minor Tactical support near $60.45, which is currently being tested. A sustained rise above this area would target an additional 12% rise to $71.00 per share. This is an Asbury Momentum trade idea.
Analysis and Rationale
Kforce Inc. (KFRC) provides professional staffing services and solutions in the United States. It operates through Technology (Tech) and Finance and Accounting (FA) segments. The Tech segment provides temporary and permanent satffing services to its clients primarily in the areas of information technology, such as systems/applications architecture and development, data management, business and artificial intelligence, machine learning, and network architecture and security. This segment serves clients in various industries comprising financial and business services, communications, and technology industries. The FA segment offers temporary and permanent staffing services to its clients in areas, including accounting, transactional finance, financial analysis and reporting, taxation, budgeting, loan servicing, professional administration, audit services and systems, and controls analysis and documentation. This segment serves clients in various industries, including financial services, healthcare, and manufacturing sectors. Kforce Inc. was founded in 1962 and is headquartered in Tampa, Florida.
The rightmost green highlights in the upper panel of Chart 1 below show that KFRC is currently rebounding from a Jun 18th test of its 50-day moving average, a widely-watched minor trend proxy current situated at $60.45. Meanwhile, the blue daily relative performance line between KFRC and the SPDR S&P 500 ETF (SPY) in the lower panel is rebounding from a coincident test of its 63-day moving average, which is our Strategic time period.
Together they suggest a new Tactical buying opportunity within KFRC’s August 2020 major uptrend as defined by its 200-day MA. Note that similar tests of outright and relative support on April 20th and Feb 2nd coincided with new Tactical periods of outright and relative strength.
A sustained rise above the $60.45 area would target an additional 12% rise to $71.00 per share.
Table 1 below shows that considering the aforementioned upside target and a protective stop placed below the $60.60 area, a long entry price of $63.23 would provide a 1:3.0 risk/reward ratio (risking $1.00 to make $3.00) with an initial risk of 4.2%.
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