Align Technologies (ALGN) was upgraded to a buy recommendation today by TheStreet's quantitative service. Regular readers of Kamich's Korner know that I regularly check the quantitative recommendations for charting ideas.
Let's check out the charts and indicators of the medical device maker Align.
In this daily bar chart of ALGN, below, we can see a wide up and down trading range market the past 12 months. Prices were more than cut in half from January to March before rebounding into early June. Prices are above the rising 50-day moving average line and the rising 200-day moving average line. We are very close to witnessing a bullish golden cross of the 50-day and 200-day averages. The On-Balance-Volume (OBV) line makes a decline from January into late March telling us that sellers were more aggressive. The OBV line has improved from late March, but it is not a really strong move to the upside. The Moving Average Convergence Divergence (MACD) oscillator gave us a buy signal in late April but this month has turned lower for a take profits sell signal.
In this weekly bar chart of ALGN, below, we can see some developing improvement with the indicators. Prices have been in a longer-term downward channel, but prices have recently broken above the upper downtrend line of the channel. Prices are above the now rising 40-week moving average line. The weekly OBV line shows some improvement and is not all that far from making a new high. The MACD oscillator crossed to a cover shorts buy signal in early May and is now close to crossing above the zero-line for an outright buy signal.
In this first Point and Figure chart of ALGN, below, we used daily price data. This chart suggests a pullback or correction to the $233 area.
In this second Point and Figure chart of ALGN, below, we used weekly price data. Here the chart is suggesting a $313 price target.
Bottom line strategy: Aggressive traders could look to buy a dip to around $240, if available, risking a close below $225.
