|The weekly chart (drawn March 10, 2003) shows several reasons why I favor ATI Technologies (ATI.to) as a buy at this level. When various indicators show positive divergence to price action, it is often a good time to consider a long entry. In this case the MACD (moving average convergence/divergence), RSI (relative strength index) and stochastics all show a positive divergence to price action. This suggests a good likelihood of an upleg starting very soon.|
|Adding weight to this bullish consideration is the fact that we are probably at a cycle low here. Note the equidistant cycle lines drawn on the chart starting from 2000.|
|Graphic provided by: stockcharts.com.|
|Upside projections taken from the daily chart suggest several targets. The first important one is the $6.32 mark which is the overhead 20-period EMA (exponential moving average) resistance. Once the stock can show strength above this test then the next level to watch is $6.85 - $7.16. This is the top Bollinger Band resistance and the 50-period EMA . (For clarity reasons the EMAs and Bollinger Bands are not shown on the chart.) Beyond that the $8 - $10 region will provide plenty of resistance as profit takers will cash in.|
At any rate watch for any candlestick reversal patterns--such as evening stars, bearish engulfing or dark cloud cover to name a few-- along the way .
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