Don't Ignore This Chart!

Prime Example Of An Untradable Stock


Prior to the opening bell on Tuesday, Fastenal (FAST) confessed to below consensus revenues and EPS, normally a big problem for a stock.  Sure enough, FAST fell approximately 4% on the open Tuesday, providing short sellers a quick profit.  The problem, however, is that FAST is trading within a multi-year trading range off of an uptrend.  The failure of earnings news to generate a breakout or a breakdown could result in this long-term trading range continuing for quite some time.  Furthermore, the current price resides exactly in the middle of price support and price resistance.  It's simply not a trading candidate at current price - in my view.  Take a look:

The above long-term pattern is bullish so I guess I'd err on the long side if I had to trade it, but it could be months or even years before we see a breakout.  Therefore, my only interest here would be if FAST were to drop closer to the bottom of this trading range.

Happy trading!


Tom Bowley
About the author: is the Chief Market Strategist at, where he provides stock market education, guidance, and trading strategies using a unique combination of technical, fundamental, and historical analysis. Tom provides members with four portfolios (Model, Aggressive, Income, and Value), all designed to beat the benchmark S&P 500, and a revolving Watch List of hundreds of companies reporting strong quarterly earnings (must beat both revenue and EPS estimates) and exhibiting technical strength as well. These companies comprise EarningsBeats' annotated Strong Earnings ChartList (SECL), from which Tom trades exclusively. Tom writes a Daily Market Report (DMR) for members to include an executive summary, market outlook, sector/industry watch, and trading ideas. Learn More
Subscribe to Don't Ignore This Chart! to be notified whenever a new post is added to this blog!
comments powered by Disqus