In my latest post I mentioned the fact I see a few stocks setting up. ANDE – Andersons is one of them. I will add the daily chart to my public list soon. Today’s technical analysis is centered around the weekly chart though. Keep in mind that as long as the market is not showing its hand there is no need to rush.
That being said, the long-term technicals with ANDE are starting to shape up and the chart is setting up for a significant break out to the upside.
Click on the chart to maximize.
As you can see on the chart, we are witnessing a coiling pattern with an ascending slope. I simply call these patterns ‘ascending consolidations’ as opposed to sideways consolidation patterns or consolidation patterns with a downward slope. The fact price is ascending during a consolidation indicates above average buying pressure. From a psychological point of view every time price dips down buyers line up and are willing to pay up as the pattern evolves. Technically, this is similar to the underlying psychology of higher lows and higher highs patterns.
What I see here is price leading into this consolidation was moving up. So far this looks like we are dealing with a continuation pattern. That means odds are very high for prices to resume the direction of the move leading into the pattern once the stock breaks out. We are most likely witnessing a bullish ABC pattern set-up. Technically speaking, a price target around 75US$ looks reasonable once the stock can take out the recent resistance area I have drawn into the chart. ANDE is trading very closely to its all time high. That alone is a sign of technical strength which makes a break out to the upside a high odds proposition. ANDE is worth monitoring very closely as the stock could enter the highly sought after ‘blue sky potential’ price zone in the not so distant future.
Here’s a few more Food related links worth rereading:
The whole government is a Ponzi scheme. – Bernard Madoff
My public list with all my charts can be viewed here:
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2791469
Buenas noches!
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