Trading Idea - Momentum Building in H&R Block

Published on Monday, 23 January 2012 19:24 Written by Christian Paolinetti

New York, January 23rd (TradersHuddle.com) - Shares of H&R Block, Inc. (NYSE:HRB) closed the trading session at $16.92 placing the price action in a very tight range, given that calculated support is set at $15.99 and the calculated resistance based on an algorithm of peaks and troughs is set at $16.93

H&R Block, Inc. (NYSE:HRB) provides tax services to the general public, accounting and consulting services, and consumer financial and personal productivity software. The company also provides a wide range of financial products.

H&R Block's stock price action indicates that both sellers and buyers are materializing very close to each other, which is indicative to a momentum building area, as the stock can resolve by breaking out of the tight range that developed.

Traders wanting to establish a position should place close attention to H&R Block's price action, as any movement outside its predefined range of $15.99 and $16.93 could grab the attention of momentum buyers, looking for a big movement in the price of the stock. Traders need to be aware that tight range resolution works both ways, hence, a move below support at $15.99 could spark above average selling. A tiered approach can be a good way to approach starting a position in H&R Block's, by establishing a starter position while the stock is in the tight range, and then adding to the position as it breaks and closes above resistance.