Conclusion, Investment Implications, Strategy
Omnicom Group Inc. (OMC) is amid favorable conditions to resume its November 2020 Strategic advance from major underlying support near $71.26, which is currently being tested. A sustained rise above this area would target an additional 11% rise to $81.61 per share. This is an Asbury Value trade idea.
Analysis and Rationale
Omnicom Group Inc. (OMC), together with its subsidiaries, provides advertising, marketing, and corporate communications services. It provides a range of services in the areas of advertising, customer relationship management, public relations, and healthcare. It operates in the United States, Canada, Puerto Rico, South America, Mexico, Europe, the Middle East, Africa, Australia, Greater China, India, Japan, Korea, New Zealand, Singapore, and other Asian countries. The company was incorporated in 1944 and is based in New York, New York.
The rightmost green highlights in Chart 1 below show that OMC is currently rebounding from a Jly 22nd test of its 200-day moving average, a widely-watched major trend proxy currently situated at $71.26 (upper panel) while rebounding from monthly (our Tactical time period) oversold extremes (lower panel). The other green highlights show that a similar instance closely coincided with a Tactical bottom on Feb 1st. These conditions set up a low-risk opportunity to buy an uptrending stock in a potentially low-risk/high reward environment, just above major support.
Chart 1
If the current major uptrend in OMC is still valid, this is where it should resume. A sustained rise above the $71.26 area would indicate this is indeed the case and target an additional 11% rise to $103.00 per share.
Table 1 below shows that considering the aforementioned upside target and a protective stop placed below the $71.22 area, a long entry price of $73.50 would provide a 1:3.6 risk/reward ratio (risking $1.00 to make $3.60) with an initial risk of 3.1%.
Table 1
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