Allegion (ALLE) is a stock we will look at today to see if it will continue higher or start the turn lower. Since December of 2018 at the low around $75.00 it has just about gone straight up to around $99 as of today.
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 Allegion in the next 72 hours and do not hold any positions in ALLE.
Allegion (ALLE): Will the Stock Continue Higher or Turn Lower?
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: 9.46B (YES)
- EPS growth past 5 years: 63.10% (YES)
- P/E: 22.52 (YES)
- EPS growth next 5 years: 8.64% (YES)
- Sales growth past 5 years: 5.70% (NO)
- Debt/Equity: 2.27 (NO)
- Sales growth qtr over qtr: 6.80% (YES)
I used Finviz.com for the fundamental analysis screener.
With Allegion (ALLE) only hitting 5 out of 7 of my growth stock parameters then this is not a stock I would consider to be a growth stock.
Its debt/equity is pretty high. Although the sales growth over the past 5 years isn’t over 20% they are at least positive in all of the sales markers I look for in growth stocks. This wouldn’t be a bad stock to keep your eye on.
Technical Analysis for Allegion (ALLE)
In looking at the daily chart we are waiting on a 127 long setup. We need the price to retrace down to $86.19 (the 1st pink line) for the trade to initiate. Once it does then the exit is the top of the green box at $89.00. But if the price doesn’t hit the exit and moves down to the 2nd pink line at $81.94 then we would get long there and move all exits to the top of the teal box at $85.90. Finally, if the price continues to move lower down to the lowest pink line at $75.01 then we would go long there and all exits move to the top of the blue box at $80.25.
If at any point an exit is hit then the move is over and we do not get in at any of the entries that have not yet been initiated. The move is over and time to look for another setup.
With the 1 hour chart, we are looking at the 61B long setup. What we are waiting for is the price to retrace back to the top pink line of $94.11. Once it does then the exit is the top of the green box at $98.00. Same rules apply to the other two entries as mentioned in the previous chart.
One thing to remember is even if the price goes below the bottom-most pink line the final exit does not move. In this case, the final exit would be at $91.25. So even if the price has never hit an exit and is below the pink line you do not have to move it again. If the price continues to go lower then you can get in at an even better price.
Conclusion for Allegion (ALLE): Will the Stock Continue Higher or Turn Lower?
Right now all we can do is wait on the daily and 1-hour chart long setups. The fundamentals aren’t the best but they aren’t terrible either. I think if this stock pulls back then the levels I mentioned in the technical analysis session should be good levels to provide some profit to your account.
Popular Links
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