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Go With the Flow on Advanced Drainage Systems

Here's how I'd approach this water-related name as it has dripped lower.
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Advanced Drainage Systems (WMS)  is involved in making high-performing, durable pipe built to provide storm water management services. Let's check out the charts and indicators.

In this daily bar chart of WMS, below, we can see that prices have rebounded sharply from a June low.

Prices have nearly doubled in just a few weeks. Amazing rally. WMS is trading above the rising 50-day moving average line and above the improving 200-day line. The 50-day line has crossed above the 200-day line for a bullish golden cross buy signal. The On-Balance-Volume (OBV) line has turned higher to confirm the price gains. The trend-following Moving Average Convergence Divergence (MACD) oscillator is above the zero-line but correcting.

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In this weekly Japanese candlestick chart of WMS, below, we can see just how strong a rally we missed - prices stopped short of $80 and soared sharply to new highs. WMS is pulling back slightly but remains above the rising 40-week moving average line. The weekly OBV line has been strong. The MACD oscillator is in a bullish alignment above the zero-line.

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In this daily Point and Figure chart of WMS, below, we can see a downside price target in the $126 area.

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In this weekly Point and Figure chart of WMS, below, we can see a $277 price target.

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Bottom line strategy: Aggressive traders could use the current pullback in price to buy shares of WMS. Risk to $120 for now. $200 is our first price target.

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