Sonic Closing in to Support?

Published on Wednesday, 21 December 2011 20:16 Written by Christopher Lynn

New York, December 21st (TradersHuddle.com) - Shares of Sonic Corp. (NASDAQ:SONC) finished near calculated support at $6.49.

Current price action with, the franchisor and operator of chain of drive-in restaurants closed at $6.63 has left shares at a level that needs to be monitored closely by traders wanting to start or add into a position in the stock.

Sonic's current stock range is defined by current calculated support defined at $6.49 and by the resistance level at $6.95.

The area defined as calculated support, is where we expect for buyers to likely materialize, which could provide a lift to the shares. However, this area if breached will signal participants that the stock failed to entice buyers to step in an support the stock.

Traders wanting to establish a position should pay close attention to Sonic's price action, and establish a position as close to support as possible, but only after buying materializes. Traders should understand that the resistance point at $6.95 might limit their upside, however if the stock breaks resistance, it could be a good point to add to the position.