Hot zone alert - May 13 2025
Your weekly guide to the the most promising trade setups in stocks, crypto, and currencies
GM everyone!
What a pleasant start to the week, wouldn’t you say?
The Dow went up more than a thousand points, the Mag 7’s looking pretty Mag… and for once, it feels like we might finally wake up from this endless Donald-Xi love/hate fever dream.
With this macro nightmare that is the US-China trade war appearing to thaw (at least for now), maybe—just maybe—we can get back to our regularly scheduled zone trading.
And today, we’ve got a fresh batch zones you might want to capitalize on.
Quick reminder: you can still be a part of our beta and try out the new Trading Places online platform—where you can make full use of our Zone Algorithm—for free!
New here? Welcome to Zone Alerts.
This is where we highlight stocks that are approaching key support and resistance zones and analyze where the action might lead.
These weekly alerts help you zero in on high-potential setups while keeping risk management in check.
What’s in this issue:
• This week’s three new hot zones
• What are zones?
Here’s what our zone algo picked up for you this week:
ITT Inc. (ITT)
Industrials • Specialty Industrial Machinery • USA • NYSE
View ITT's zones here
ITT has been staging a massive, V-shaped recovery after a depressing start to the year. It’s now up more than 40% since bouncing off its November 2021 zone just a month ago.
Right now, though, it’s running into a familiar wall.
The August 2024 zone has been tricky for ITT. Rejections here in October 2024 and January 2025 both led to painful pullbacks.
It did manage to get past the zone in November, but that breakout was short-lived.
And looking at the current setup, we might be in for more of the same.
Although MACD still has signs of sustained momentum, it’s approaching levels where previous rallies topped out.
RSI is also already flashing overbought, and volume during this rally has noticeably been thinning.
This is looking more and more like another bounce off resistance. And if the pullback is as sharp as before, a move back to the December 2023 zone could mean a 17% slide.
Allison Transmission Holdings Inc. (ALSN)
Consumer Cyclical • Auto Parts • USA • NYSE
View ALSN’s zones here
For months, ALSN’s October 2024 zone has given the stock problems. But with recent tariff headlines, ALSN appears ready to finally punch through and chase previous highs.
The stock’s MACD is looking promising—having recently crossed above zero, and its RSI—although nearly overbought—has historically reached 80+ before showing any real signs of exhaustion.
But given the lack of the ⚡ symbol above yesterday’s “breakout,” our zone algorithm is likely still waiting for another confirmation candle before tagging this penetration as legit.
If we get that in the next few days, the upside could be huge. Riding the move up to the November 2024 zone could lead to potential gains of more than 17%.
Bio-Techne Corp. (TECH)
Healthcare • Biotechnology • USA • NASD
View TECH’s zones here
TECH has been nowhere and back lately—drifting sideways and managing a whopping… +1.8% over the last 30+ days.
But that changed yesterday, when it managed to penetrate not one—but two resistance zones—from February 2019 and September 2018.
That leaves only one major hurdle immediately ahead: the June 2019 resistance zone.
With its MACD having flipped bullish recently, RSI only at 56, and volume coming in relatively strong—there’s a real shot this could turn into a proper breakout…
But we need a clean close above $56 to confirm it.
If that happens, we’re looking at a potential reversal—up to the August 2020 zone or even beyond. That’s a solid 11-16% upside if it plays out.
WTF are Zones, anyway?
Zones are key price levels where the market has reacted strongly in the past—such as sharp reversals or sudden swings.
They’re areas where actual supply and demand met in the past, and likely will meet again.
“Why are these significant?”
Well, it all comes down to three key principles. We like to call them The Principles of:
When I Dip, You Dip, We Dip (aka psychology)
Traders are aware that others are watching these levels (zones) too. With everybody paying attention, this creates a self-fulfilling prophecy where everybody acts in anticipation of everybody else’s actions.
Markets Gonna Market ¯\_(ツ)_/¯ (aka technical factors)
If the first price rejection at the top of a zone was violent, it’s likely that buyers who entered at that level are now holding losses.
But with each retest, the rejection weakens, as there are fewer buyers remaining underwater. This weakens that resistance (or support for all you short-sellers), and could eventually lead to a break through.
Killer Whales (aka institutional plays)
Big players need liquidity in order to place massive orders without moving the market against themselves. So they wait for these zones, knowing a lot of us small fry (retail traders) will come to play.
This allows them to buy low or sell high without causing a lot of waves.
But remember: Zones are NOT guarantees but rather regions of increased probability for market moves. So always, ALWAYS use proper risk management.
Trading Places: Launch coming soon!
Stop obsessively refreshing your charts like it’s your ex’s Instagram.
By combining historical patterns with real-time market data, Trading Places identifies zones and assigns probabilities to each one—helping traders spot potential plays with higher chances of success.
It automates all of the curation, chart-plotting, and alerting for you, so you can actually have a life (or at least pretend to)!
Stay tuned!
Disclaimer: This isn't financial advice. This shouldn’t be news to you.