PPL Setting for a Break Out?

Published on Friday, 27 January 2012 06:08 Written by Christopher Lynn

New York, January 27th (TradersHuddle.com) - Shares of PPL Corporation (NYSE:PPL) closed the trading session at $28.20 near its 50 day and 200 day moving averages currently set at $28.92 and $28.19 respectively. PPL's price action is above the 200 day moving average but below its 50 day moving average, signaling a possible break out.

PPL Corporation (NYSE:PPL) is an energy and utility holding company. The Company, through its subsidiaries, generates electricity from power plants in the northeastern and western United States, and markets wholesale and retail energy primarily in the northeastern and western portions of the United States, and delivers electricity in Pennsylvania and the United Kingdom.

PPL price action seems to be setting up for a tight range between the 200 day moving average as support and the 50 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 PPL with a small position and wait for the stock to break out above the 50 day moving average at $28.92, where traders could add to their position as momentum builds with the breakout. The flip side will be if support being referenced at the 200 day moving average set at $28.19 breaks it could mean further downside in the horizon for PPL.