Will Frontier Communications recover?

Published on Wednesday, 14 December 2011 06:12 Written by Christian Paolinetti

New York, December 14th (TradersHuddle.com) - Shares of Frontier Communications Corporation (NYSE:FTR) closed the trading session at $4.99 below calculated support at $5.22 breaking current long setups, raising concerns by the bulls, as this move might give the bears the upper hand.

Frontier Communications Corporation (NYSE:FTR) provides communications services to rural areas and small and medium-sized towns and cities. The Connecticut based company offers a variety of voice, data, Internet, and television services.

Frontier's stock was trading in a well defined range with support at $5.22 and resistance at $5.85; 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 Frontier's stock is still near the broken support, traders will be focusing on $5.22 to see if the stock can bounce back and return to its previous range.

Traders wanting to establish a short position in Frontier Communications can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes again at previous support of $5.22. 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.