Align Technology: Sink Your Teeth Into Some Profits

Shares of ALGN are extended.
Stocks quotes in this article: ALGN

Shares of Align Technology Inc. (ALGN) gapped sharply higher Thursday. We last reviewed the charts of ALGN on June 25 and recommended that "Aggressive traders could look to buy a dip to around $240, if available, risking a close below $225."

With the stock trading around $440 Thursday a change in strategy is needed.

In the daily candlestick chart of ALGN, below, we can see Thursday's upside gap or rising window. The shares are off their best levels of the day so far. ALGN is nearly $200 above the rising 200-day moving average line, which is one measure of being overbought or extended.

The On-Balance-Volume (OBV) line has been rising with the price action and confirms the gains. Trading volume has been declining during the advance and the Moving Average Convergence Divergence (MACD) oscillator was weakening from June. 

 
In this daily Point and Figure chart of ALGN, below, we can see the price run-up with all the prices filled in. Prices have exceeded the projected $396 price target. 
 
 
In this weekly close-only Point and Figure chart of ALGN, below, we can see a long-term price target of $544. 
 
 
Bottom-line strategy: Shares of ALGN are extended when compared to the 200-day moving average line. This is a good time and place to take profits if you are long.
 
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