ATK: pattern and volume suggesting breakout

Alliant Techsystems Inc. (ATK) was in deeply oversold territory this past summer and rallied approximately 33% from the July lows to early November highs.

The rally stalled at resistance, which came from a major down trend line.

A symmetrical triangle pattern began forming directly below the long term down trend line.

Due to the cluster of resistance, from the upper boundary line of the pattern and the long term down trend line, an upside breakout would be extremely significant. Once the pattern triggers, 86 dollars is the minimum expected price objective, based on the height of the pattern.

Chart 1:  The weekly chart below illustrates the symmetrical triangle that has been forming directly below a long term down trend line.


Photo: Zev Spiro

Chart 2:  Outlines the symmetrical triangle pattern on a daily chart, and explains why an upside breakout is anticipated based on the volume pattern.Also included is an alternative entry strategy, for aggressive traders that wish to anticipate the trigger.

Trigger: confirmed move above the upper boundary line, Target: approximately $86, Protective Stop: conservative: confirmed move back below the upper boundary line.


Photo: Zev Spiro


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Disclaimer: The information contained herein is not guaranteed. This is not a solicitation of any order to buy or sell. This material is based upon information that I consider to be reliable, but I do not guarantee its completeness or accuracy. Assumptions, opinions and recommendations contained herein are subject to change without notice, and I am not obligated to update the information contained herein. I do not have a position in the security or securities mentioned. This communication, including any attachments, is for the exclusive use of the intended recipient(s) and/or the intended recipient’s designees. Any use, retention or dissemination by a person other than the intended recipient is strictly prohibited. If you are not the intended recipient or designee, please notify the sender immediately by return e-mail and delete/destroy all copies of this communication.  

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