Hold Tight or Take Profits? The Atlas Copco Dilemma at Technical Crossroads

The shares of Atlas Copco AB ADR - Class B (ATLCY) have been on a tear, rising 24.5% since April 8, 2025, and closing at $14.94 on May 16. Yet beneath the surface, a clash is brewing between short-term technical optimism and macroeconomic and fundamental risks that could unravel the rally. Investors now face a critical question: Should they lock in gains now, or ride the momentum into what could be a precarious landscape?

Let’s dissect the crosscurrents.

The Technical Allure: Momentum vs. Divergence

The immediate case for holding ATLCY rests on its short-term technical strength. The stock’s short-term moving average (SMA) remains decisively above the long-term moving average, signaling a bullish trend. A buy signal triggered in mid-April has fueled gains of nearly 6% over the past two weeks. However, a glaring volume-price divergence undermines this narrative.

On May 16, the stock closed up 0.47% at $14.94, but trading volume plummeted by 5,000 shares compared to the prior session, dropping to just 166 shares—a near-record low. This mismatch between rising prices and fading participation is a red flag. Historically, such divergences often precede corrections as institutional buyers step back.

The MACD Sell Signal: A Bearish Omen?

While the moving averages paint a bullish picture, the 3-month MACD histogram is flashing a sell signal—a stark contradiction. This indicator, which measures momentum, suggests that upward thrust is waning. If the MACD’s bearish stance prevails, it could overpower the moving averages’ optimism, especially if macro risks materialize.

Support Levels Under Pressure: A Fragile Foundation

The stock’s current price of $14.94 is comfortably above its immediate support at $13.53, but the distance is narrowing. A breach of this level would open the door to deeper support at $13.31 and, ultimately, $12.40. The problem? The 10% downside forecast over three months implies a potential drop to ~$13.45—just below the $13.53 threshold.