Skip to main content

The market did well on Friday, while Fastenal (FAST) - Get Fastenal Company Report stock did outright incredible as shares gained 17.1% and closed at $36.34 on better-than-expected earnings.

The move launched Fastenal stock to new all-time highs, as investors begin to ask themselves, "What now?"

A look at the charts will reveal some important resistance/support zones, so investors can better pinpoint where this name may be heading. Working in the bulls' favor, though, is the robust price action following the company's quarterly results. That's a tailwind that should aid in future momentum.

Interestingly, though, the headline results did not blow the doors off. Earnings of 37 cents per share beat expectations by a penny, while revenue of $1.38 billion was in-line with expectations after growing 7.8% year-over-year.

The quarter was solid, but not likely good enough to justify such a robust rally in many investors' minds. Let's take a look at the chart to see if they can guide us from here.

Trading Fastenal Stock

Daily chart of Fastenal stock.
Scroll to Continue

TheStreet Recommends

Above is a daily chart of Fastenal stock, highlighting how shares broke out over short-term downtrend resistance (blue line), over the September high of $34.09 and over the annual high of $35.69.

Currently above its former 52-week and all-time high by a healthy margin, that mark now becomes a level of support investors will want to see hold on any future pullback. Below that and Friday's open at $34.10, and the 78.6% retracement at $33.39 is on the table.

The stock's opening price and subsequent rally is notable, not just because it helped push FAST stock to new highs, but because it launched it out of its channel (blue lines). This channel has been in place for years, as shown via the weekly chart below.

Weekly chart of FAST stock.

On a pullback, bulls would love to see former channel resistance turn into current uptrend support, while also seeing its former highs hold up as support. If that becomes the case, it will shift momentum into bulls' favor in dramatic fashion.

Given that Fastenal stock is now in uncharted territory, investors are flying blind to some degree when it comes to the upside. They can turn to Fibonacci extensions to get an idea of where a stock could go, but they are far from guaranteed possibilities.

The first one that stands out to me is the 127.2% extension, which is at $39.19. That's about 7.5% above current levels. More importantly, though, let's see if various former resistance marks can turn to support. That will keep the bull thesis intact and give traders a solid risk/reward entry opportunity. 

This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.