Cognizant Technology Solutions Well Structured Setup

Published on Thursday, 19 January 2012 07:20 Written by Christopher Lynn

New York, January 19th (TradersHuddle.com) - Shares of Cognizant Technology Solutions Corporation (NASDAQ:CTSH) closed the trading session at $69.35 near its 50 day and 200 day moving averages currently set at $66.92 and $69.89 respectively. Cognizant's 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.

Cognizant Technology Solutions Corporation (NASDAQ:CTSH) provides custom Information Technology (IT) consulting and technology services as well as outsourcing services. The Company focus in technology strategy consulting, complex systems development, and enterprise software package implementation.

Cognizant Technology Solutions 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 Cognizant Technology Solutions with a small position and wait for the stock to break out above the 200 day moving average at $69.89, 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 $66.92 breaks it could mean further downside in the horizon for Cognizant Technology Solutions.