Playing the Momentum Building in International Flavors & Fragrances

Published on Friday, 30 December 2011 07:32 Written by Danny Miller

New York, December 30th (TradersHuddle.com) - Shares of International Flavors & Fragrances Inc. (NYSE:IFF) closed the trading session at $52.69 placing the price action in a very tight range, given that calculated support is set at $51.94 and the calculated resistance based on an algorithm of peaks and troughs is set at $54.80

International Flavors & Fragrances Inc. (NYSE:IFF) creates and manufactures flavor and fragrance products. The products are sold to manufacturers of perfumes, cosmetics, soaps and detergents, and its flavor products to manufacturers of prepared foods, beverages, dairy foods, pharmaceuticals, and confectionery products.

International Flavors & Fragrances' stock price action indicates that both sellers and buyers are materializing very close to each other, which is indicative to a momentum building area, as the stock can resolve by breaking out of the tight range that developed.

Traders wanting to establish a position should place close attention to International Flavors & Fragrances' price action, as any movement outside its predefined range of $51.94 and $54.80 could grab the attention of momentum buyers, looking for a big movement in the price of the stock. Traders need to be aware that tight range resolution works both ways, hence, a move below support at $51.94 could spark above average selling. A tiered approach can be a good way to approach starting a position in International Flavors & Fragrances', by establishing a starter position while the stock is in the tight range, and then adding to the position as it breaks and closes above resistance.