Adobe Breaking Down?

Published on Monday, 08 February 2010 18:11 Written by Christopher Lynn

New York, Feb 8^th (TradersHuddle.com) - Shares of Adobe Systems Incorporated (NASDAQ:ADBE) closed the trading session at $32.05 below calculated support at $32.06 breaking the stock technically, raising concerns by investors, as the move might trigger more selling.

Adobe Systems Incorporated (NASDAQ:ADBE) develops, markets, and supports computer software products and technologies. The Company's products allow users to present and use information across all print and electronic media. Adobe offers a line of application software products, type products, and content for creating, distributing, and managing information. The company popular Acrobat Reader allows companies and consumers to exchange a wide variety of electronic information and documents.

Adobe's stock was trading in a well defined range with support at $32.06 and resistance at $38.2; given that this range was broken traders will be closely monitoring the stock?s price action for clues of direction.

From a technical perspective it can be expected that previous support becomes resistance, as the new range gets defined, however, given that Adobe's stock is still near the broken support, traders will be focusing on $32.06 to see if the stock can bounce back and return to its previous range.

Traders wanting to establish a short position in Adobe can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes at previous support of $32.06. For traders wanting to establish a long position the current setup is to wait for the stock to get back to calculated support, given that the stock is still near from this level.