Align Technology, Inc. (NASDAQ: ALGN)

Align Technology, Inc., a medical device company, designs, manufactures, and markets clear aligner systems or Invisalign systems, intra-oral scanners, and computer-aided design (CAD) and computer-aided manufacturing (CAM) restorative models used in dentistry, orthodontics, and dental records storage in North America and Internationally. The company’s clear aligner products include Invisalign Full for the treatment of malocclusions; Invisalign Express and Invisalign Lite solutions for less complex orthodontic cases; Invisalign Teen, which is primarily marketed to orthodontists for treating malocclusion in teenage patients; Invisalign Assist for use in anterior alignment and aesthetically-oriented cases; and Vivera retainers for invisalign and non-invisalign patients. It also offers ancillary products comprising cleaning material and adjusting tools used by dental professionals during the course of treatment. In addition, it offers CAD/CAM services, such as iTero Models and Dies; OrthoCAD iCast and OrthoCAD iRecord that provides a digital alternative to traditional stone cast models, which allows for simplified storage and digital record retrieval; and OrthoCAD iQ, a computer-guided system for optimal placement of traditional brackets and customized indirect bonding tray system. The company distributes its products primarily directly to orthodontists and general practitioner dentists, as well as restorative dentists, including prosthodontists, periodontists, and oral surgeons.

To review Align’s stock, please take a look at the 1-year chart of ALGN (Align Technology, Inc.) below with my added notations:

1-year chart of ALGN (Align Technology, Inc.)

ALGN has (2) important trendlines to watch. First, ALGN has formed a downtrending resistance level (red) that currently sits near $35. In addition, the stock has been climbing a long-term, up-trending support level (blue) over the last (10) months. Over the last (2) months, these two levels combined have ALGN stuck within a common chart pattern known as a Symmetrical Triangle. Eventually, the stock will have to break one of those two levels.

The Tale of the Tape: ALGN has an up trending support and a downtrending resistance level to watch. A long trade could be made on a breakout above the resistance. A break below the up trending support could be an opportunity to enter a short trade.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT