Flowserve Dipping Below Support

Published on Tuesday, 22 November 2011 19:20 Written by TradersHuddle Staff

New York, November 22nd (TradersHuddle.com) - Shares of Flowserve Corporation (NYSE:FLS) closed the trading session at $93.74 below calculated support at $94.45 breaking the stock technically, raising concerns by investors, as the move might trigger more selling.

Flowserve Corporation (NYSE:FLS) manufactures, sells, and services industrial flow management equipment throughout the world. The Company provides pumps, valves, and mechanical seals primarily for the refinery and pipeline segments of the petroleum, chemical processing, power generation and water treatment industries.

Flowserve's stock was trading in a well defined range with support at $94.45 and resistance at $100.77; 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 Flowserve's stock is still near the broken support, traders will be focusing on $94.45 to see if the stock can bounce back and return to its previous range.

Traders wanting to establish a short position in Flowserve can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes again at previous support of $94.45. For traders wanting to establish a long position, wait for price action to take the stock back to calculated support, which will provide a best entry point to build the position.