Fastenal Company (FAST) recently broke out of a symmetrical triangle pattern that formed throughout 2024, characterized by gradually narrowing highs and lows. The stock climbed above $50 but has since dropped to around $46, reflecting an 8% decline from its peak. Traders are now trying to determine if this drop is a temporary pullback in an upward trend or the start of a more significant decline. If the stock finds support in the $44-46 range, it could bounce back toward $50, with deeper support at $38.60. If it fails to maintain these levels, it might fall to the $38-40 support zone, wiping out most gains from the breakout. A close below $38 would invalidate the breakout, indicating a false jump and possibly leading to more losses. While the current pullback is typical for markets, its extent will show us the future direction for FAST’s price, testing whether buyers or sellers will take control next. How the stock reacts at these support levels will influence its next moves. Looking back from today, Fastenal’s breakout in 2024 was textbook, following the symmetrical triangle pattern. After surpassing $50, the stock is now consolidating around $46. The big question as we head into October 2025 is whether this is a healthy retest or the start of a decline. For a bullish strategy, selling weekly put spreads below the $44 support level could work well. This strategy allows us to earn premiums based on the expectation that the previous resistance from 2024 will now act as a support floor. The recent US Manufacturing PMI for September 2025, just below 50, signals stability in the industrial sector, which could boost FAST if conditions improve. On the other hand, the bearish view is valid, especially after Fastenal’s Q3 2025 earnings report showed a slight slowdown in daily sales growth, indicating some weakness in the industrial sector. If the $44 level doesn’t hold, we might buy puts to target a return to the $40 support area, which would erase much of the 2024 breakout gains. Implied volatility for FAST options is rising, making put or call purchases more costly but rewarding for premium sellers. This indicates that traders expect a significant move out of the current tight range. With upcoming economic data that could act as a catalyst, we are looking for a potential straddle opportunity to capitalize on a move in either direction. A similar pattern occurred in 2021 when the stock broke out but then pulled back sharply to test old resistance before climbing higher over the next two quarters. This history suggests that the current pullback is not unusual, and patience at these levels could pay off.

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