Fastenal (Friday’s close US$47.53) traded within a large horizontal trading range mostly between US$18 and US$27 from 2012 (not shown) to 2018 followed by another range from $24 to $30 (dashed lines). It had a breakout in early 2019 (A) and started to trade above a rising trend-line (solid line). Earlier this year, the stock dipped temporarily below this line (B) but then quickly resumed the up-trend to a new all-time high of US$49.86 (C).
At that time, the stock became extremely overbought and has since pulled back slightly toward its 40-week Moving Average (40wMA – D). There is good support at ±US$43 and then again near the 40wMA (±US$41); only a sustained decline below this level would be negative.
Point & Figure measurements provide targets of US$54 and US$59. The large trading ranges (dashed lines) support higher targets.
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Monica Rizk is the senior Technical Analyst and Ron Meisels is the president of Phases & Cycles Inc. (www.phases-cycles.com). And he tweets at @Ronsbriefs. They may hold shares in companies profiled.
Chart source: www.decisionplus.com
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