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AEIS Charts: Room to Move Higher

Technical analysis suggest Advanced Energy Industries is headed for more gains. Now's the time to establish a position.



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Advanced Energy Industries

(AEIS) - Get Report

makes industrial power conversion products.

Other companies use those products to produce things such as semiconductor devices, flat-panel displays and solar panels. Given the likelihood of a continued focus on alternative energy, this supplier of manufacturing capabilities appears reasonably well positioned to continue to expand.

Starting with the weekly chart, we can see that, on an intermediate-term basis, AEIS has just confirmed a bullish advance by trading to, and closing higher than, the previous swing point with volume. This confirmation comes after a torrid advance over the past month.

That advance has seen prices push higher and higher as volume came into the stock.

With that perspective, when we pull up the long-term view, it's apparent that AEIS has the $17.50-$18.00 range as its next target.

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At that price point, there is a confluence of swing highs and lows that will act as a formidable barrier to a further price advance. That's 20% away, though, and at that time we'll have to see how those price points are attacked.

The short-term time frame echoes the intermediate in that we see rapid volume expansion on the daily bars.

Note that on a daily basis, the close over the swing points has not yet been confirmed as volume was quite light last week due to the holidays.

That suggests that, on a short-term basis, more work is required to build sufficient strength to move higher and confirm on this time frame. That is the opportunity for you to establish a position and to participate on the likely advance that is to come.

So, until next time, keep trading the charts!

At the time of publication, Little was long Advanced Energy Industries.

L.A. Little is an author, professional trader and money manager who writes daily on

, a free educational site for traders and investors. He has been featured in Stocks & Commodities magazine and is the author of

Trade Like The Little Guy