$ATI Poised for a breakout

Allegheny Technologies ( $ATI )  has been lagging its peers in the steel group.  You can see in the bottom panel of the daily chart that $DJUSST, the Steel industry group, is outperforming SPY.  Meanwhile $ATI has been pinned under $18.50 since August.

I am watching $ATI closely here.  When I look at the weekly chart below, what catches my eye is both the bullish ascending triangle with price pressing towards $19 and the big volume / price air pocket between $19 and $26.  If price were able to punch through $18.50  – $19, I think you’d see a quick run to $26 with nothing in the way.

The Trade: 
Use both the daily and weekly chart in conjuction with one another. Alarm  above $18.50 on the daily for a head’s up on the move. That is your first trigger, Then, look for the weekly to close above $19.  That is the final trigger to get long.  I’d use $18.50 on the weekly as a stop loss. If the weekly closes below $18.50, kill the trade; It would be a failed breakout.

My first target is $26 on the weekly chart.    Let’s see how price behaves over the next week or so. Hopefully the set up pans out, but be patient and wait for it. Set your alarms so you dont miss the move.

Happy Hunting and Good Trading



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