Will Allegheny recover?

Published on Monday, 01 February 2010 10:03 Written by TradersHuddle Staff

New York, 31^st (TradersHuddle.com) - Shares of Allegheny Technologies Inc. (NYSE:ATI) closed the trading session at $40.85 below calculated support at $41.27 breaking the stock technically, raising concerns by investors, as the move might trigger more selling.

Allegheny Technologies, Inc. (NYSE:ATI) manufactures and sells specialty metals worldwide. The Company's products include include titanium and titanium alloys, nickel-based alloys and superalloys, zirconium, hafnium and niobium, stainless and specialty steel alloys.

Allegheny's stock was trading in a well defined range with support at $41.27 and resistance at $53.39; given that this range was broken traders will be closely monitoring the stock?s price action for clues of direction.

From a technical perspective it can be expected that previous support becomes resistance, as the new range gets defined, however, given that Allegheny's stock is still near the broken support, traders will be focusing on $41.27 to see if the stock can bounce back and return to its previous range.

Traders wanting to establish a short position in Allegheny can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes at previous support of $41.27. For traders wanting to establish a long position the current setup is to wait for the stock to get back to calculated support, given that the stock is still near from this level.