Will ALLEGRO MICROSYSTEMS INC (NASDAQ:ALGM) Break Out? A Technical Analysis Perspective.

ALLEGRO MICROSYSTEMS INC (NASDAQ:ALGM) was identified as a Technical Breakout Setup Pattern by our stockscreener. Such a pattern occurs when we see a pause in a strong uptrend: after a strong rise the stock is consolidating a bit and at some point the trend may be continued. Whether this actually happens can not be predicted of course, but it may be a good idea to keep and eye on NASDAQ:ALGM.

Zooming in on the technicals.

ChartMill assigns a Technical Rating to every stock. This score ranges from 0 to 10 and is updated daily. The score is determined by evaluating multiple technical indicators and properties.

We assign a technical rating of 7 out of 10 to ALGM. ALGM has been one of the better performers in the overall market. Some doubts were observed in the medium time frame, but recent action was again very positive.

• ALGM is one of the better performing stocks in the Semiconductors & Semiconductor Equipment industry, it outperforms 86% of 108 stocks in the same industry.
• Both the short term and long term trends are neutral. So this is not the most entertaining stock around.
• Looking at the yearly performance, ALGM did better than 82% of all other stocks. However, this overall performance is mostly based on the strong move around 4 months ago.
• ALGM is currently trading in the middle of its 52 week range. This is in line with the S&P500 Index, which is also trading in the middle of its range.
• In the last month ALGM has a been trading in the 21.16 - 29.45 range, which is quite wide. It is currently trading in the middle of this range, so some resistance may be found above.
• Volume is considerably higher in the last couple of days.

Check the latest full technical report of ALGM for a complete technical analysis.

How do we evaluate the setup for ALGM?

ChartMill takes into account not only the Technical Rating but also assigns a Setup Rating to each stock. This rating, on a scale of 0 to 10, reflects the degree of consolidation observed based on short-term technical indicators. Currently, ALGM exhibits a 7 setup rating, indicating its consolidation status in recent days and weeks.

ALGM has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately. There is very little resistance above the current price. There is a support zone below the current price at 24.94, a Stop Loss order could be placed below this zone.

Trading breakout setups.

A breakout could materialize when the stock breaks out to new highs above the current consolidation zone. One could wait for this to happen and buy when this happens. A stop loss could be placed below the consolidation zone.

Of course, there are many ways to trade or not trade ALGM and this article should in no way be interpreted as trading advice. The article is purely based on an automated technical analysis and just points out the technical observations. Always make your own analysis and trade at your own responsibility.

More breakout setups can be found in our Breakout screener.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.