The price of Allstate (ALL) has been tracing out a tradable double-bottom formation since August. The recent uptick in ALL looks like a breakout we want to follow.
In this daily bar chart of ALL, above, we can see the first low of this double bottom in August/September. Prices rally up to a November/December peak and back down for the second low in January. Prices are now breaking above the winter peak to complete the base.
Prices are above the rising 50-day moving average and above the flat 200-day average. The On-Balance Volume (OBV) line is flat on a daily scale (see the weekly chart below). The Moving Average Convergence Divergence (MACD) oscillator is in positive territory above the zero line.
The rally in ALL is shaping up nicely on this weekly chart above. Prices have firmed enough to get above the 40-week moving average. The OBV line is rising steadily on this timeframe. The MACD oscillator gave a cover shorts signal and could soon move above the zero line for a buy signal. Traders who like double bottoms can go long ALL here and risk a close below $62. The low $70s is our upside target.