Allegheny Technologies Goes 2 for 2: Upgrade and Strong Chart

Allegheny Technologies (ATI) was upgraded today by TheStreet's quantitative service. I couldn't wait to look at the charts and indicators to find if the charts were in agreement with this upgrade.

Instead of keeping you in suspense, let's check the charts.

In this daily bar chart of ATI, above, we can see a big saucerlike pattern. Prices went from $23 down to $15 and back up to $23 again. Since the low in May around $15, we have seen the chart strengthen as prices rallied above the rising 50-day and 200-day moving average lines. The daily On-Balance-Volume (OBV) has been rising the past three to four months and tells us that buyers of ATI are being more aggressive. The Moving Average Convergence Divergence (MACD) oscillator moved above the zero line in June for an outright go-long signal.

In this weekly bar chart of ATI, above, we can see an uptrend with prices above the rising 40-week moving average line. There is no chart resistance until the $30 area.

Now look at the weekly OBV line, which has been rising since early 2016, telling us that for many months buyers of ATI have been accumulating shares. The weekly MACD oscillator is above the zero line in a bullish configuration.

In this Point and Figure chart, above, we can see ATI has doubled and there is still no distribution or selling. A $26.72 price target is shown but the weekly bar chart does not have resistance until $30.

Bottom line: A strong chart and a quantitative upgrade -- two for two. I favor the long side of ATI looking for gains to around $30. Risk below $20.

Click here to subscribe to Quant Ratings, where you can read our full report on ATI or more than 4,000 other stocks that our service rates in real time every market day. 

However, please note that our Quant Ratings service assesses stocks using a proprietary computer model that runs a variety of factors through quantitative and technical analysis. Ratings do not necessarily reflect the opinions of Jim Cramer or other columnists, who may use different criteria to grade stocks. 

This column originally appeared at 2:10 p.m. ET today on Real Money, our premium site for active traders. Click here to get great columns like this from Bruce Kamich, Jim Cramer and other writers even earlier in the trading day. 

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