Fastenal Stock Staring Up at Key Resistance

FAST gapped below the $50 level last week

Jul 27, 2022 at 2:33 PM

FAST

Shares of Fastenal Company (NASDAQ:FAST) gapped lower after a July 13 earnings report, before rallying back to their February lows and settling beneath the round $50 level. What's more, the equity went ex-dividend on July 16, and price action was weak after its last two ex-dividend dates. With this setup in mind, now seems like ideal time to bet on FAST's next leg lower.

The security's 12-month consensus price target of $48.43 could also represent a level of resistance. Further, the shares are facing headwinds from growing short interest after five years of covering.

Our recommended November put has a leverage ratio of 6, and will double on a 14.8% fall in the underlying stock.

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