ATKR Stock: Geared for Higher Stock Prices
The market continues to roar toward higher index values, which is why trying to fight the tape has been a very poor decision lately. The current catalyst responsible for fueling the move toward higher index values has been a slew of better-than-expected earnings reports.
I am highlighting Atkore International Group Inc (NYSE:ATKR) because, on the heels of better-than-expected third-quarter earnings, Atkore stock completed a technical price pattern suggesting that a powerful move toward higher prices is now likely to follow.
This completed technical price pattern is highlighted on the following Atkore International stock chart.
Chart courtesy of StockCharts.com
This ATKR stock chart illustrates that, since inception, Atkore International stock has been carving out a technical price pattern known as a symmetrical triangle.
Symmetrical triangle price patterns develop when the price action is characterized by a sequence containing a series of lower highs and higher lows, which create peaks and troughs.
Identifying this pattern is achieved by connecting these peaks and troughs using trend lines. The end result is two converging trend lines that capture and depict a triangle pattern.
These trend lines provide very important information because they pinpoint where significant levels of price support and price resistance reside. The reason why is that the pattern will only be resolved when the stock price either breaks above resistance or breaks below support. When it does, the stock is expected to continue moving in that direction.
The move that follows is usually powerful, because triangle patterns have the ability to build and store energy as they develop. This phenomenon is created by the convergence of space between price support and price resistance.
Once the pattern becomes apparent to traders, they position themselves on either side of support and resistance in anticipation of a possible breakout. Once the pattern is resolved, the order flow gets triggered, which fuels the move that follows.
On August 7, Atkore International stock broke above the trend line that represented price resistance, completing the symmetrical triangle. This event is now suggesting that a powerful move toward higher ATKR stock prices is expected to follow.
The magnitude of the breakout and the way it was accomplished is highlighted on the following Atkore International stock chart because it provides pertinent information.
Chart courtesy of StockCharts.com
This ATKR stock chart highlights the breakout responsible for completing the symmetrical triangle.
On August 7, 2018, Atkore stock gapped higher by 14.9% on the heels of a better-than-expected third-quarter earnings report that beat expectations on both the top and bottom lines.
This surge in price, which completed the symmetrical triangle, was accompanied by a price gap. I labeled this gap a breakaway gap because breakaway gaps rarely get filled and almost always signal that a sustained move toward higher prices has begun.
The gap and the surge in price that followed are reinforcing the notion implied by the completed symmetrical triangle; that ATKR stock is now geared for higher prices.
Going forward, I would be looking for applicable trading setups in order to capitalize on a potential move toward higher prices.
Atkore International stock has just completed a technical price pattern suggesting that it is now geared toward higher ATKR stock prices. As a result, I am bullish on the prospects of this investment going forward, and I will maintain this view until there indications suggesting that it is no longer warranted.