United Rentals is extending yesterday’s breakout with another 5% of upside.  News of the company’s plan to acquire BlueLine Rental has sparked today’s big ramp.  This powerful two day move is attracting heavy volume as shares blow through major trendline resistance that includes the May, June and August highs.  The stock is set up well for more upside which could lift shares to new all-time highs.

After gaining over 75% from the August 2017 lows to the January 2018 peak URI was in need of a healthy consolidation.  The stock put in a slightly higher high in March but it was clear by the end of the month that upside momentum had eased.  URI spent the next five months drifting lower in a narrowing range as the consolidation wore on.  During this process the $143.00 area, which held the summer lows, developed into a major support zone.  This solid base has given URI the footing needed to mount a new rally cycle.

Trading notes:    URI is working on a second straight higher monthly low.  The stock’s weekly MACD(moving average convergence/divergence)traced out a bullish cross last week.  URI now has layers of support in place.  Initial band is near $165.00(200 day moving average).  Lower band is marked by the August peak($161.50).  On the downside, a close back below last week’s high($159.00)would be a clear warning sign that more basing action is on the way. 

At time of publication we do not have a position in URI.