US Airways Ready for a Pull Back?

Published on Wednesday, 25 January 2012 19:52 Written by Danny Miller

New York, January 25th (TradersHuddle.com) - Shares of US Airways Group, Inc. (NYSE:LCC) closed the trading day at $7.52 well above its calculated resistance at $6.57, which was calculated from a peak and throughs algorithm, making traders worry about a possible pull back in the stock price.

US Airways Group, Inc. (NYSE:LCC) is an air carrier that transports passengers, property, and mail. The Company provides regularly scheduled service at airports in the United States, Canada, Europe, the Caribbean, and Latin America. The airline operates with major hubs in Phoenix, Charlotte and Philadelphia.

US Airways' stock broke out of its defined range that had support at $4.97 and resistance at $6.57. Now the stock is working on developing a new trading range, which should be defined by the high setup after this breakout and its probable support, which could be its previous resistance level $6.57.

From a technical perspective traders should wait to establish a position in US Airways until a base in the stock develops that can provide good reference points to the upside and most importantly to the downside, for traders have a risk reference point before entering into a position on US Airways stock.