Align Technology Has Broken Its Bullish Alignment

Should investors still sink their teeth into this one?

I last reviewed the charts of Align Technology (ALGN) on July 17, writing that "Traders could go long ALGN or add to longs on ALGN on weakness near the $360 area. Risk to $330. The $425 area is my nearest price target."

ALGN has broken below $330 so traders should be stopped out of longs now.

Let's check the charts again to see if this is the start of further declines in the weeks ahead.

In the daily bar chart of ALGN, below, I can see that the shares have turned down below the 50-day moving average line and the slower-to-react 200-day moving average line is not all that far below the price action now.

The On-Balance-Volume (OBV) line has been weak since February and that tells me that sellers of ALGN have been more aggressive than buyers for several months now. The Moving Average Convergence Divergence (MACD) oscillator is now crossing below the zero line for an outright sell signal.

 

In the weekly Japanese candlestick chart of ALGN, below, I can see a less-than-stellar picture. Prices are weakening and are only a few dollars above the rising 40-week moving average line.

 

The weekly OBV line has been stalled the past four months. The MACD oscillator is above the zero line but weakening.

 

 

In this daily Point and Figure chart of ALGN, below, I can see a tentative downside price target in the $280 area.

 

 

In this second Point and Figure chart of ALGN, below, I used weekly price data with a five-box reversal filter. Here the software suggests a downside price objective in the $220 area.

 

 

Bottom-line strategy: The charts are lining up for further declines in the weeks and months ahead.

 

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