ATI Stock: A War Is Being Waged Around the $30.00 Price Point
I for one, do not believe in coincidences. This notion is especially true when it comes to analyzing the merits of an investment using technical analysis.
The reason why I am bringing this up this phenomenon is because one of my favorite technical indications is when coinciding signals are generated at the same time. I believe that coinciding signals are powerful indications that mark important and influential inflection points.
The reason why I am emphasizing coinciding signals is because I have my eye on Allegheny Technologies Incorporated (NYSE:ATI) stock. I am watching ATI stock because it is testing a significant level of price resistance that resides at $30.00. This level of price resistance is very special because two distinct metrics are suggesting that price resistance currently resides at this price point.
The first metric suggesting that $30.00 is a significant level of price resistance is captured on the following Allegheny stock chart.
Chart courtesy of StockCharts.com
This Allegheny stock chart illustrates that for all of 2018, the stock has been unable to break above $30.00. This level of horizontal resistance was tested in January, May, July, and it is currently being tested once again.
Each time this level of price resistance has been tested, a sell-off has followed. These sell-offs have been finding price support at higher highs, suggesting that the selling pressure that is instilled upon ATI stock when it reaches price resistance at $30.00 is waning.
This is why I am starting to believe that perhaps resistance will finally be broken on this next attempt. Breaking above this level of price resistance will finally allow Allegheny stock to appreciate, opening the door for further gains to follow.
To put into context the implications of breaking above resistance, I have provided the second metric suggesting that $30.00 is also a significant level of price resistance.
That second metric is captured on the following ATI stock chart.
Chart courtesy of StockCharts.com
This stock chart illustrates that since 2007, after Allegheny stock peaked at $99.82, the stock price has been caught in a bearish trend.
The downtrend line highlighted on the chart above captures this bearish trend. This trend line was simply created by connecting the peaks that were created by the bearish price action.
This downtrend line acts as a dividing line that is separating ATI stock’s current bearish trend from a potentially bullish one.
Price resistance outlined by this downtrend line also currently resides at $30.00. It puts into perspective why it has been so difficult to break above this level of price resistance.
If Allegheny stock can break above $30.00, it will not only break above a horizontal level of price resistance, implying that higher prices are likely to follow, but it will also suggest that the bearish trend that began in 2007 has finally run its course, opening up the possibility for a bullish trend to follow.
This why breaking above $30.00 will be a very important and significant event. Aside from just the implications suggested by this event, the move that follows is expected to be powerful because two levels of price resistance are going to break at the same time.
As we have seen, breaking above this significant level of price resistance has not been easy, but ATI stock has been quite resilient and it continues to attack this price point.
A war is currently being waged at $30.00. The more times it is tested, the more likely the bulls are going to be victorious and higher Allegheny stock prices will follow as a result.
I am watching the trading action in Allegheny stock because I believe that once price resistance at $30.00 is broken, much higher ATI stock prices will follow.