Brocade near Key Resistance Area

Published on Wednesday, 07 December 2011 19:04 Written by Christian Paolinetti

New York, December 7th (TradersHuddle.com) - Shares of Brocade Communications Systems, Inc. (NASDAQ:BRCD) are trading very close to calculated resistance at $5.59 with the current price action closing at just $5.56 placing the stock near levels that make it difficult to buy.

Brocade Communications Systems, Inc. (NASDAQ:BRCD) provides switching solutions for storage area networks. Its family of SilkWorm switches enables a company to manage growth of its data storage requirements, improve the data transfer performance, and increase the size of its storage area networks.

Brocade's current stock range is defined by current calculated support defined at $4.38 and by the resistance level at $5.59, the stock is clearly over-extended from support, making it difficult to establishing new long positions at this level.

Traders don't have a clear entry point for Brocade, as the stock is well above support, however, as the stock pulls back towards $4.38 it will definitely provide a reference point to establish a trade. On the other hand if the stock decides to break above resistance level at $5.59 then traders will get an opportunity to enter Brocade stock by establishing a position as the stock moves to a higher range.