Conclusion, Investment Implications, Strategy
PGT Innovations, Inc.(PGTI) is amid favorable conditions to resume its May 2020 Strategic advance from major underlying support near $21.95, which is currently being tested. A sustained rise above this area would target an additional 24% rise to $28.11 per share. This is an Asbury Value trade idea.
Analysis and Rationale
PGT Innovations, Inc.(PGTI) engages in the manufacture and supply of windows and doors under the brand name PGT Custom Windows + Doors; CGI; WinDoor; Western Window Systems; Eze-Breeze; and CGI Commercial. It operates through the Southeast and Western geographical segments. The company was founded by Rodney Hershberger in 1980 and is headquartered in Nokomis, FL.
The rightmost green highlights in Chart 1 below show that PGTI is currently testing its 200-day moving average, a widely-watched major trend proxy currently at $21.95 (upper panel) while rebounding from monthly (our Tactical time period) oversold extremes (lower panel). The other green highlights show that similar oversold environments closely coincided with three other Tactical bottoms in Late March, late January, and October 2020. These conditions set up a low-risk opportunity to buy an uptrending stock in a potentially low-risk/high reward environment just above major support. If the current major uptrend in PGTI is still valid, this is where it should resume.
Chart 1
A sustained rise above the $21.95 area would indicate this is indeed the case and target an additional 24% rise to $28.11 per share.
Table 1 below shows that considering the aforementioned upside target and a protective stop placed below the $21.72 area, a long entry price of $22.70 would provide a 1:5.5 risk/reward ratio (risking $1.00 to make $5.50) with an initial risk of 4.3%.
Table 1
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Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.