During Thursday's "Mad Money" program, host Jim Cramer told his viewers that he likes stocks like Agco (AGCO) and Align Technology (ALGN) , as these stocks make you consistent money over time while also letting you sleep at night.
In our April 30 review of ALGN, we recommended "ALGN made a bearish key reversal Thursday but there is no follow-through selling. If Thursday's price action kick started a downtrend it would be bearish but it has not happened thus far. Traders who are long ALGN from earlier recommendations should continue to hold those positions with our suggestion of a stop loss at $570. The $821 area is our price objective."
In this updated daily bar chart of ALGN, below, we can see that prices have continued higher from late April. Notice the recent new highs? ALGN is trading above the rising 50-day and 200-day moving averages. The On-Balance-Volume (OBV) line has been steady/quiet since early February. The Moving Average Convergence Divergence (MACD) oscillator has turned upward for a new outright-buy signal.
In this weekly Japanese candlestick chart of ALGN, below, we can see that prices have charged to a new high. The slope of the 40-week moving average line is bullish. The weekly OBV line shows improvement from March, but is still shy of making a new high to confirm and support the new price highs. The MACD oscillator has narrowed sharply and is close to an upside crossover and potential new buy signal.
In this daily Point and Figure chart of ALGN, below, we can see the recent price gains and a potential price target of $744.
In this weekly Point and Figure chart of ALGN, below, we can see a tentative price target in the $894 area.
Bottom line strategy: Traders should have been stopped out of longs in the early May price weakness to around $540. If you trade without stops I guess you are still long. I would raise stops to $590 now. The $744 area is our nearest price target.
