Stirling Stock Analysis: At $20 or Lower, Control4 CTRL Is a Buy

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Control4, CTRL, chart, technical analysis

(Control4 (CTRL) stock was recommeded by Stirling Strategic Investor on July 5.)

Strong, rising support above the 13-week simple moving average (SMA) has been a staple of the current breakout for Control4 (CTRL).

The recent highs have created resistance in the $20-to-$21 area. The consistent higher lows with the same highs has formed a very tight ascending triangle and there are two approaches to consider for entry.

Take a partial position in the $19-to-$20 range, anticipating the ascending triangle resolves to the upside. The remaining position would be purchased on the breakout above the resistance level of $21.
Our initial target on a breakout, independent of fundamental views, would be $24 in short fashion with an ultimate upside of $29 within 12 to 18 months, based on the current price patterns.

CTRL has Broken out Above the Resistance Level of its Ascending Triangle Pattern

On Tuesday, shares of CTRL closed at $27.04, well above the previous resistance line on the ascending triangle. While volume is a little disappointing, secondary indicators, Stochastics and Stochastics RSI, have pushed higher along with price.

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The bullish moves in both momentum and trend confirm this is a breakout worth considering. Confirmations don’t equal guarantees. But the odds of success increase with each added indicator of support.

Our first target of $24 was met in short fashion, but our timeframe for hitting $29 has been reduced to 6-to-9 months from 12-to-18 months as both technical and fundamental momentum are strong.

Previous resistance of $26 now becomes a new support level. Additionally, the previous rising support levels now transition to a secondary level of support at $24. We’d consider $24 as a potential area for setting a trailing stop with the expectations $21 would hold should $24 fail.

Furthermore, if we examine the past breakout above resistance, we find multiweek moves higher in a very controlled fashion (no pun intended).

Control4, CTRL, chart, technical analysis

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