Insights 
VT 
Fastenal Company (FAST) recently executed a breakout from a symmetrical triangle pattern formed throughout 2024, marked by steadily narrowing highs and lows. The company’s stock price surpassed the upper trendline, reaching above $50, but has since retracted to about $46, an 8% drop from the peak.
Traders are evaluating whether this is a retracement within an emerging uptrend or a precursor to further decline. If support is found around the $44-46 range, a rebound might target $50, with a potential deeper support at $38.60. Failure to hold current levels may see a decline toward the $38-40 support area, negating most breakout gains.
A close below $38 would invalidate the breakout, indicating a false surge and potentially leading to further losses. The current pullback is within normal market patterns, but its depth will indicate the future direction of FAST’s price, testing whether buyers or sellers will dominate next. The reaction at these support levels will determine the stock’s subsequent movement.
Looking back from our perspective today, that breakout in Fastenal during 2024 was a textbook move following the symmetrical triangle pattern. After hitting over $50, the stock is now testing our patience, consolidating near the $46 mark. The key question for us in the coming weeks of October 2025 is whether this is a healthy retest or the beginning of a breakdown.
For a bullish play, selling weekly put spreads with a short strike below the $44 support level could be a viable strategy. This approach allows us to collect premium based on the belief that the former resistance from 2024 will now hold as a floor. The latest US Manufacturing PMI reading for September 2025, which came in just under the 50-point mark, suggests the industrial sector is stabilizing, potentially providing a tailwind for FAST if conditions improve.
Conversely, the bearish argument has merit, especially after Fastenal’s latest Q3 2025 earnings report showed a slight deceleration in daily sales growth, reflecting some industrial softness. If the $44 level fails to hold, we would consider buying puts to target a move back toward the $40 support zone. Such a move would effectively erase a significant portion of the gains from the 2024 breakout.
Implied volatility for FAST options has been ticking higher, making it more expensive to buy puts or calls outright but more rewarding for premium sellers. This suggests traders are pricing in a decisive move out of the current tight range. Given this, we are watching for a potential straddle opportunity to play a breakout in either direction, especially with upcoming economic data releases that could act as a catalyst.
We saw a similar pattern when looking back at the stock’s price action in 2021. After a major breakout, the stock pulled back sharply to test the old resistance level before grinding higher over the next two quarters. This history suggests that the current pullback is not unusual and that patience at these levels could be rewarded.
