Loews Tight Range between the 50 and 200Day

Published on Wednesday, 11 January 2012 18:56 Written by Christian Paolinetti

New York, January 11th (TradersHuddle.com) - Shares of Loews Corporation (NYSE:L) closed the trading session at $38.34 near its 50 day and 200 day moving averages currently set at $38.08 and $39.18 respectively. Loews' price action is above the 50 day moving average but below its 200 day moving average, which provide a nice trading setup, with clear reference points.

Loews Corporation (NYSE:L) is a diversified holding company. The Company, through its subsidiaries, is involved in a variety of businesses including commercial property-casualty insurance, offshore drilling, natural gas exploration and production, operation of natural gas pipeline systems, and the operation of hotels and resorts.

Loews price action seems to be setting up for a tight range between the 50 day moving average as support and the 200 day moving average serving as resistance.

A tiered approach to enter the stock, appears to be the best way to maximize possible movements from the stock, as traders could enter Loews with a small position and wait for the stock to break out above the 200 day moving average at $39.18, where traders could add to their position as momentum builds with the breakout. The flip side will be if support being referenced at the 50 day moving average set at $38.08 breaks it could mean further downside in the horizon for Loews.