Arctic Cat Inc. (NASDAQ: ACAT)

Arctic Cat, Inc. designs, engineers, manufactures, and markets snowmobiles and all-terrain vehicles under the Arctic Cat brand name. It also provides related parts, garments, and accessories. The company offers accessories consisting of bumpers, cabs, luggage racks, lights, snow plows, backrests, windshields, wheels, track systems, and winch kits; shocks, attachments, and float avalanche airbags; and maintenance supplies, such as oil and fuel additives. In addition, the company provides snowmobile garments for adults and children under the Arcticwear label; and garments for ATV and recreational off-highway vehicle riders under the Arcticwear ATV Gear label, as well as insulated outerwear under the Drift Racing brand name. Its garment portfolio includes jackets, coats, pants, hats, mittens, helmets, boots, sweatshirts, T-shirts, casual wear, suits, gloves, gear bags, and casual sportswear items.

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

1-year chart of ACAT (Artic Cat, Inc.)

ACAT has been trading sideways since the end of July, but running into a $46 resistance (navy) since April. The $46 resistance meets my definition of a clear resistance level that would signify an important 52-week high breakout if ACAT could manage to break above it. IF that were to happen, the stock should probably be heading higher overall. For now, the stock seems to be pulling back to its key level of $40.

The Tale of the Tape: ACAT has formed a key resistance level at $46, which would be a 52-week high breakout if the stock can break above it. A long trade could be entered if ACAT breaks above $46, or pulls back to $40, with a stop set below the level of entry. A short trade could be entered instead if the stock were to break below the $40 support.

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