Advanced Drainage technical comments before earnings, potential bearish pattern
Ahead of earnings the most notable technical feature on the 1-year daily chart is a potential bearish head and shoulders pattern. The left shoulder of that pattern began forming in April of this year. A breakdown below $22 on negative news or outlook would trigger the pattern. Downside potential would be to the $15.50 to $15 over time. If the news is a positive surprise, the first notable resistance level would be at $24.60, the top of the right shoulder of the head and shoulders on a closing price basis. A move above $25 would void the pattern. When technical patterns fail during earnings, the counter-reaction can be very strong. Resistance levels to watch above $25 would be at $25.97, $27.74, and the $30 area depending on the nature of the news.