Up, Up And Away

09/14/17 03:29:26 PM

by Koos van der Merwe

When one discovers a share that simply goes up and up and up, do you buy it?

Security: AMT
Position: Accumulate

American Tower is an independent owner, operator and developer of wireless and broadcast communications real estate. The company's sites are home to cellular and wireless, radio and television broadcast and two-way radio communications equipment. With towers all over the USA, and the demand for mobile devices rising, the company has a solid future ahead.

Figure 1. Monthly chart with Elliott wave count.

Graphic provided by: AdvancedGET.

The chart in Figure 1 is a monthly chart showing how the share price has risen from a low of 60 cents in October 2002 to its current high of $146.09. An Elliott wave count shown on the chart suggests that the share price could be completing WAVE 3 and could fall in a WAVE 4 to either $115.32 or $97.59. The RSI indicator is at overbought levels but has not yet suggested a sell. Volume fell as the price rose, suggesting weakness.

Figure 2. Daily chart with Elliott wave count.

Graphic provided by: AdvancedGET.

The chart in Figure 2 is a daily chart with an Elliott wave count suggesting that the share price is in a WAVE 5 that could rise to $159.63 before correcting. The RSI indicator is close to overbought levels, suggesting that the price could rise.

Figure 3. Daily Omnitrader chart showing buy signal.

Graphic provided by: Omnitrader.

The chart in Figure 3 is a daily Omnitrader chart with the Vote line suggesting a buy on August 21 based on the JM and Vervoort Stop strategies shown in green below the Vote line. The share price is testing the upper Bollinger Band, suggesting that a correction is on the cards.

Figure 4. Weekly Omnitrader chart.

Graphic provided by: Omnitrader.

The weekly Omnitrader chart in Figure 4 shows a buy signal given on the Vote line on August 14 based on all three strategies below the Vote line. The RSI indicator is at overbought levels and starting to trend down but has not yet given a sell signal by falling below the 70 horizontal.

AMT is a share that should always be on one's watchlist. The share is an up, up and away share, and once the correction suggested by the charts is complete, it is a share for buy and hold.

Koos van der Merwe

Has been a technical analyst since 1969, and has worked as a futures and options trader with First Financial Futures in Johannesburg, South Africa.