Playing the Setup in Aflac

Published on Thursday, 19 January 2012 06:28 Written by Christian Paolinetti

New York, January 19th (TradersHuddle.com) - Shares of Aflac, Inc. (NYSE:AFL) closed the trading session at $45.18 near its 50 day and 200 day moving averages currently set at $43.06 and $43.92 respectively. Aflac's price action is above these important levels, which could translate into a trading opportunity.

Aflac, Inc. (NYSE:AFL) and through its subsidiaries, provides supplemental insurance in the United States and Japan. Some of Aflac's products include accident/disability plans, cancer expense plans, short-term disability plans, sickness and hospital indemnity plans, and hospital intensive care plans.

Although the price action is above important moving averages, it's important to highlight that the 50 day moving average is currently below the 200 day moving average resulting in not a prime setup where buying the dip will present a good trading opportunity.

Looking at peaks and troughs horizontal support and resistance levels, we can see current calculated support at $42.30 and calculated resistance at $44.86. These levels should also be evaluated by traders when planning their trades, as they provide an insight into the latest price action.

If traders want to establish a position on Aflac, should evaluate their trade, as it will certainly be better to wait, given that the stock is technically broken with the 50 day moving average trading below the 200 day moving average. Traders can also look at the current range defined by the peaks and troughs see where the current price action of stock is and establish a short trade versus those levels.