Why Aterian Stock Looks Like It Broke Out Of Wedge Pattern

Aterian Inc. ATER shares rallied Wednesday, moving higher as many retail traders pushed the stock higher. Aterian is a popular name in Reddit’s Wall Street Bets community.

The stock looks to have broken out of a technical pattern.

Aterian was up 29.35% at $9.21 at the close Wednesday.

Aterian Daily Chart Analysis

• Shares were falling for a few months, but have since looked to break out of what technical traders call a falling wedge pattern.
• The stock was being condensed between narrowing highs and lows and was able to break above pattern resistance. The stock looks to be breaking out after pushing higher by over 25%.
• The stock crossed above the 50-day moving average (green) Wednesday, but still trades below the 200-day moving average (blue), indicating sentiment may be beginning to turn bullish.
• The stock may find support near the 50-day moving average, while the 200-day moving average may act as resistance.
• The Relative Strength Index (RSI) has been moving higher in recent weeks and now sits at 64. The push higher indicates that the stock is now seeing more buying pressure than selling pressure.

What’s Next For Aterian?

Bullish traders would like to see the stock continue to break out and move higher. Once the stock cools off, bulls want to see the stock consolidate for a time before possibly making a move higher.

Bears would like to see the stock drop back to where it was trading in the pennant pattern and to drop below where pattern support would be. Bears are also looking for a drop below the moving averages for the sentiment to bearish again.