Insteel Industries Inc. (IIIN) was rallying nearly 8% to $32.10 Thursday afternoon, and TheStreet's Quant Ratings service upgraded the name to a "Buy" -- which got me looking at the stock's charts and technical indicators.
Now, Insteel isn't a household name (at least not to me), but this daily bar chart shows how the stock has recently exploded higher:
Prices are above the rising 50-day moving average (the yellow line in the chart at the top above), and have also recently broken above Insteel's flattening 200-day moving average (the blue line above at top).
But this chart shows that Thursday's upside move didn't really happen overnight, as Insteel has been working higher since late August. The stock's On-Balance-Volume line (OBV) has also been generally moving up since August, telling us that buyers have been more aggressive. Additionally, the Moving Average Convergence Divergence oscillator (MACD) gave a "Cover Shorts/Buy" signal in August, followed by "Buy" signals in October and December.
In this IIIN weekly bar chart, we can see that the stock is also trading above a declining 40-week-moving-average line (the yellow line below):
This chart also shows how Insteel has made some wide swings (both up and down) over the past three years. However, IIIN's weekly OBV line has been rising since August, while the MACD oscillator on this time frame is close to crossing the zero line for an outright "Go Long" signal.
We can also see an uptrend since 2010 in this Point and Figure chart:
The chart above shows that Insteel's recent upside breakout opens the way for a possible price target of $53.35.
The bottom line -- our Quant Ratings service says "Buy," while my technical analysis says to purchase Insteel at $32 or better, risking a close below $29. My longer-term upside targets are $40 and $50-$53.