Specialty electrical equipment company AZZ (AZZ) broke out to the upside recently, got extended and corrected back to the breakout zone where we would consider buying it.
AZZ had two downside tests in August and October that were quickly repelled. Prices rocketed higher this month and broke out to new highs. Prices got extended on the upside and have just pulled back.
This weekly chart of AZZ, above, shows prices above the rising 40-week moving average, telling us the trend is up.
The On-Balance-Volume line has moved up in recent months and the trend-following Moving Average Convergence Divergence oscillator is in a bullish position above the zero line.
After a two and one-half year consolidation, AZZ is ready to keep moving on up. We would use this pullback to go long using an appropriate sell stop if we are wrong.