Conclusion, Investment Implications, Strategy

Orthofix Medical Inc. (OFIX) is amid favorable conditions to resume its November 2020 Strategic advance from major underlying support near $39.31, which was tested and held over the past several days.  A sustained rise above this area would target an additional 18% rise to $48.50 per share.  This is an Asbury Value trade idea.

Analysis and Rationale

Orthofix Medical Inc. (OFIX) operates as a medical device and biologics company in the United States, Italy, Germany, the United Kingdom, Brazil, and internationally. It operates through two segments, Global Spine and Global Extremities. The company markets and distributes its products through direct sales representatives; independent distributors; and employed and independent sales representatives to physicians, hospitals, ambulatory surgery centers, integrated health delivery systems, and other purchasing organizations. The company was formerly known as Orthofix International N.V. and changed its name to Orthofix Medical Inc. in July 2018. Orthofix Medical Inc. was founded in 1987 and is headquartered in Lewisville, Texas.

The rightmost green highlights in Chart 1 below show that OFIX is currently testing its 200-day moving average, a widely-watched major trend proxy currently at $39.31 while rebounding from monthly (our Tactical time period) oversold extremes.  The other green highlights show that previous similar oversold extremes closely coincided with three Tactical bottoms in OFIX since January.  These conditions set up a low-risk buying opportunity to buy an uptrending stock in a potentially low-risk/high reward environment, just above major support.  If the current major uptrend in OFIX is still valid, this is where it should resume.

Chart 1

A sustained rise above the $39.31 area would indicate this is indeed the case and would target an additional 18% rise to $48.50 per share. 

Table 1 below shows that considering the aforementioned upside target and a protective stop placed below the $39.23 area, a long entry price of $41.20 would provide a 1:3.7 risk/reward ratio (risking $1.00 to make $3.70) with an initial risk of 4.8%.

Table 1

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Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.