Strong Technical Breakout with Solid Fundamentals | Long Setup

Ticker: ATAT (NYSE)
Timeframe: Daily & 4H
Strategy: Swing Trade / Position Trade

📈 Trade Idea: LONG
Entry: $39.08 (Breakout confirmation above consolidation)

Stop Loss: $34.47 (Below key support and 50-period SMA)

Take Profit 1: $44.50

Take Profit 2: $48.19 (1:2 R:R Target)

Risk/Reward Ratio: 1:2

🎯 Technical Rationale:
Trend: Strong bullish alignment across all timeframes (Daily, 4H, 1H). The stock has broken out of a period of consolidation on increasing volume.

Breakout: The price has decisively moved above the recent resistance zone near $38.50, signaling a potential continuation of the uptrend.

Indicators:

RSI: Is in bullish territory (~70 on Daily) but not severely overbought, indicating strong momentum with room to run.

MACD: Is positive and above its signal line on both Daily and 4H timeframes, confirming the bullish momentum.

Moving Averages: The price is trading well above its key SMAs (20 & 50), which are fanned out and sloping upwards, confirming the trend.

Stop Loss: Placed at $34.47 to account for normal volatility and to protect against a false breakout. This level is below a previous support level and the rising 50-period SMA.

📊 Fundamental Catalyst:
This isn't just a technical play. The breakout is supported by strong underlying fundamentals:

Explosive Growth: ATAT has demonstrated strong growth in both revenue and net income.

Healthy Balance Sheet: The company has a minimal debt load and an excellent interest coverage ratio, indicating financial stability.

Valuation: While the P/E is slightly high, it is justified by its growth rate. The P/S ratio is undervalued, suggesting the market may not be fully pricing in its revenue potential.

This combination of technical breakout and fundamental strength significantly increases the probability of a successful trade.

⚖️ Risk Management:
Position size accordingly so that a hit to the Stop Loss does not significantly impact your portfolio.

Consider taking partial profits at TP1 ($44.50) and moving your stop loss to breakeven to lock in gains while letting the remainder run towards TP2.

Good luck, and trade safe!

Disclaimer: This is not financial advice. This post is for educational and informational purposes only. Always do your own research and consider your risk tolerance before entering any trade.