On January 29 I did a write-up on Align Technology (ALGN): https://evancarthey.com/align-technology-algn-reports-tomorrow-should-you-buy-or-sell/. It focused on earnings and how I was going to trade the stock. This post today will be a longer-term look and see what setups are there and what I would look to do moving forward for Align Technology (ALGN): A Longer Term Look at the Stock.
We will look at the 7 fundamental parameters I look to see if a stock can be considered a growth stock.
Then we will take a look at the technical analysis side using the setups I have created and use for my trades. I have no plans to own Align Technology in the next 72 hours and do not hold any positions in ALGN.
Align Technology (ALGN): A Longer Term Look at the Stock – Fundamentals
There are 7 fundamental markers I look for in a stock. I try to only purchase growth stocks so these are the parameters I look for to see if a stock meets the majority of the markers. I prefer to have all seven fulfilled. You can it more in depth here: https://evancarthey.com/how-to-scan-for-winning-stocks-an-insiders-view-to-my-process/
- Market Cap: > $300 million
- EPS growth past 5 years: >0%
- P/E: Over 10
- EPS growth next 5 years: >0%
- Sales growth past 5 years: Over 20%
- Debt/Equity: <0.1
- Sales growth qtr over qtr: Over 5%
Does the stock meet these 7 markers?
- Market Cap: 69.01B (YES)
- EPS growth past 5 years: 44.60% (YES)
- P/E: 69.01 (YES)
- EPS growth next 5 years: 21.50% (YES)
- Sales growth past 5 years: 24.40% (YES)
- Debt/Equity: 0.04 (YES)
- Sales growth qtr over qtr: 25.70% (YES)
I used Finviz.com for the fundamental analysis screener. Ding, ding, ding! We have a winner! Align Technology hits all 7 of the fundamental markers I look for in a stock to be considered a growth stock. This was a stock I have owned in the past and will look to get in on the future if it ever has a pullback to fit my long grade setups.
Technical Analysis for Align Technology
In this 61B long setup using the hourly chart
we first need price to go back up and hit the orange line at $331.26. If it doesn’t then the rest of what I will talk about for this move will not be valid.
If price hits the orange line then we will be looking at the pink lines as the entry points. The 1st pink line is at the 38% Fibonacci retracement level at $277.12. The exit is the top of the green box at $308. But if the price continues to go lower and doesn’t hit the top of the green box then the next entry is the 2nd pink line at $257.71. This will move the exits to $276.
Finally, if the price continues to move lower without hitting the previous exit of $276 then you would go long at the bottom pink line at $225.67. The exit then moves to the top of the blue box at $256.
If at anytime an exit is hit then you disregard any entry that is not hit. The move is over and time to look for a new setup.
Above is the monthly chart for Align Technology. This is a word of warning because it is almost identical to the levels of emotions in stock charts.
In the image above you can see how similar it is to Align Technology’s monthly chart. Now, this doesn’t mean ALGN will follow the exact path but it is something I wanted to point out. If it does then the stock is currently in the bull trap know as “return to normal” stage before the stock does its huge move down.
But with the fundamentals being so strong I’m not sure it applies. It is something I wanted to point out in order to cover as many bases as I can in this post.
Popular Links
Here are a couple of links if you are looking at how I view the market and some trade setups. You can create your own trading style and setups. Quit paying losing traders to teach you. The only thing they teach is how to lose money.
Robinhood Trading Broker Review
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My Robinhood Review: https://evancarthey.com/review-robinhood-trading-service-with-no-fees-part-1/
