Rackspace near Key Resistance Area

Published on Sunday, 15 January 2012 13:40 Written by Christian Paolinetti

New York, January 15th (TradersHuddle.com) - Shares of Rackspace Hosting, Inc. (NYSE:RAX) are trading very close to calculated resistance at $45.45 with the current price action closing at just $43.35 placing the stock near levels that make it difficult to buy.

Rackspace Hosting, Inc. (NYSE:RAX) operates in the hosting and cloud computing industry. It provides managing Web-based IT systems for small and medium-sized businesses, as well as large enterprises worldwide. Its service suite includes dedicated hosting comprising managed hosting service that manages data center, network, hardware devices, and operating system software; private cloud service, which enables large enterprises to virtualize their IT environments.

Rackspace's current stock range is defined by current calculated support defined at $41.37 and by the resistance level at $45.45, 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 Rackspace, as the stock is well above support, however, as the stock pulls back towards $41.37 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 $45.45 then traders will get an opportunity to enter Rackspace stock by establishing a position as the stock moves to a higher range.