Align Technology Stock Soars Higher After Earnings

I would like to see some sideways trading or even a pullback next.
Stocks quotes in this article: ALGN

Back on July 27 I reviewed the charts and indicators of Align Technology (ALGN) , writing that "I have no knowledge of what ALGN is going to announce to shareholders this evening, but its charts have been showing improvement since early May. Aggressive traders could probe the long side of ALGN ahead of the numbers only if they can afford to risk down to $225."

Prices rallied into the middle of August and then slowly declined to new lows in November. Shares of ALGN gapped sharply higher today (Thursday) on the heels of their earnings beat. Let's check out the charts again.

In this daily bar chart of ALGN, below, I can see how prices recovered the past two months. ALGN was already trading above the 200-day moving average line before today's huge gap higher. Prices have been trading above the rising 50-day moving average line since the middle of December.

The daily On-Balance-Volume (OBV) line has moved higher in the past two months as traders have become more aggressive buyers. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish move above the zero line. 

 
 
In this weekly Japanese candlestick chart of ALGN, below, I see a strong advance underway. Prices are above the 40-week moving average line.
 
The weekly OBV line shows a strong advance over the past three months. The MACD oscillator has been improving since July and is just below the zero line. 
 
 
 
In this daily Point and Figure chart of ALGN, below, I can see that prices reached and exceeded an upside price target in the $249 area. Note: gaps on Point and Figure charts are filled in. 
 
 
 
In this weekly Point and Figure chart of ALGN, below, I can see a price target in the $713 area. Wow!  
 
 
 
Bottom line strategy: ALGN has soared sharply higher and is probably going to close strong. I want to see some sideways trading or even a pullback to know where to suggest a sell stop before recommending purchase.
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TAGS: Earnings | Investing | Stocks | Technical Analysis | Trading | Health Care Equipment & Services | Consumer Discretionary

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