Trading Idea - Is Discovery Communications close to Resistance?

Published on Wednesday, 18 January 2012 19:40 Written by Christian Paolinetti

New York, January 18th (TradersHuddle.com) - Shares of Discovery Communications, Inc. (NASDAQ:DISCA) are trading very close to calculated resistance at $44.22 with the current price action closing at just $43.99 placing the stock near levels that make it difficult to buy.

Discovery Communications, Inc. (NASDAQ:DISCA) operates as a media and entertainment company worldwide. The Company operates a wide range of educational television channels as well as offers consumer and educational products and services, and a diversified portfolio of digital media services. The company operates cable and satellite television networks in the United States, including Discovery Channel, TLC, Animal Planet, Discovery Health, Discovery Kids, Science Channel, Planet Green, Investigation Discovery, Military Channel, FitTV, and HD Theater.

Discovery's current stock range is defined by current calculated support defined at $39.33 and by the resistance level at $44.22, 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 Discovery Communications, as the stock is well above support, however, as the stock pulls back towards $39.33 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 $44.22 then traders will get an opportunity to enter Discovery Communications stock by establishing a position as the stock moves to a higher range.