Cummins Closing in to Resistance

Published on Monday, 23 January 2012 06:12 Written by Christian Paolinetti

New York, January 23rd (TradersHuddle.com) - Shares of Cummins Inc. (NYSE:CMI) are trading very close to calculated resistance at $106.10 with the current price action closing at just $104.78 placing the stock near levels that make it difficult to buy.

Cummins Inc. (NYSE:CMI) designs, manufactures, distributes and services diesel and natural gas engines. The Company also manufactures electric power generation systems and engine-related component products, including filtration and exhaust aftertreatment, fuel systems, controls, and air handling systems. The Cummins, Inc. headquartered in Columbus, Indiana.

Cummins' current stock range is defined by current calculated support defined at $85.51 and by the resistance level at $106.10, 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 Cummins, as the stock is well above support, however, as the stock pulls back towards $85.51 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 $106.10 then traders will get an opportunity to enter Cummins stock by establishing a position as the stock moves to a higher range.