Good technical signals and a possible breakout for Fastenal Company.

Our stock screener has spotted Fastenal Company (NASDAQ:FAST) as a possible breakout candidate. A technical breakout setup pattern occurs when the stock is consolidating after a nice uptrend. Whether the actual breakout occurs remains to be seen of course, but it may be interesting to keep an eye on NASDAQ:FAST.

Technical analysis of NASDAQ:FAST

ChartMill assigns a proprietary Technical Rating to each stock. The score is computed daily by evaluating various technical indicators and properties. The score ranges from 0 to 10.

We assign a technical rating of 7 out of 10 to FAST. This is due to a decent performance in both the short and medium term time frames. Compared to the overall market, FAST is only an average performer.

• Both the short term and long term trends are positive. This is a very positive sign.
• FAST is currently trading in the upper part of its 52 week range. The S&P500 Index however is currently trading near a new high, so FAST is lagging the market slightly.
• When comparing the performance of all stocks over the past year, FAST turns out to be only a medium performer in the overall market: it outperformed 44% of all stocks.
• In the last month FAST has a been trading in the 50.81 - 54.76 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.

How do we evaluate the setup for NASDAQ:FAST?

Next to the Technical Rating, the Setup Rating of a stock determines to which extend the stock is consolidating. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. For NASDAQ:FAST this score is currently 8:

Besides having an excellent technical rating, FAST also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. A pullback is taking place, which may present a nice opportunity for an entry. There is a resistance zone just above the current price starting at 53.91. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 53.4, a stop order could be placed below this zone.

Trading breakout setups.

One way to play this would be to wait for the actual breakout to happen and buy when the stock breaks out above the current consolidation zone. A possible place for a stop loss would be below this zone.

This article should in no way be interpreted as trading advice. You should always make your own analysis and trade or not trade based on your own observations and style. The article is based purely on some technical observations.

More breakout setups can be found in our Breakout analyzer.