When you mention the word acuity most people think of the definition of “sharpness of vision” or “the visual ability to resolve fine detail”. To me, on the other hand, I think of the lighting and controller company, AYI. The company’s stock has performed impressively, tremendously outperforming the index by more than 40% over the last 15 months (most of that occurring in the first 6 months).
As you can see in the chart below, the stock topped out around $145/share in March of last year and has been consolidating since then. What developed during this consolidation period was a very nice, cup and handle pattern that had the $145 share price as the top of the cup, acting as strong resistance. You can see that each time it attempted to move higher, the bears rejected it handily pushing prices lower. But what happened last week is a textbook bullish move that should make investors salivate. Price gapped up above the $145 price on big volume, flipping the prior resistance now to support. In addition, the RSI momentum indicator is firmly in the bullish range, the MACD histogram is positive and all 3 moving averages are bullishly stacked.
With the continued weakness of the general stock market, this stock is (and probably continue) treading water waiting to move higher when the overall selling pressure subsides. An ideal entry point would be a back test and hold above the $145 level. The beauty of this entry is the risk/reward ratio is very compelling considering a stop loss would be placed just under the $145 level letting you know the bulls have relented and given controls back to the bears.