Rare Pattern Points to AutoNation Reversal

A rare pattern has formed on the weekly chart of AutoNation (AN), the largest automotive retailer in the U.S. The formation, supported by several technical indicators, suggests the stock price could move significantly higher from its current level.

AutoNation (AN) -- Weekly Source: StockCharts.com View Chart » View in New Window »

The diamond formation is a combination of expanding and symmetrical triangles that usually mark a top, but is also considered a continuation pattern. A target price projection is measured in the same way as are normal triangle patterns: by taking the height of the pattern at its widest point, and measuring that distance from the breakout level. In the case of AutoNation, the height at the apex of the diamond measures $12 -- which, added to the $36 breakout level, projects to the $48 area....249 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

Read the full story and get access to the Real Money Pro trading floor.

There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.

Already a Subscriber? Please login.

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.