Range Tightening in Express Scripts

Published on Wednesday, 01 February 2012 06:00 Written by Christian Paolinetti

New York, February 1st (TradersHuddle.com) - Shares of Express Scripts, Inc. (NASDAQ:ESRX) closed the trading session at $51.16 placing the price action in a very tight range, given that calculated support is set at $50.14 and the calculated resistance based on an algorithm of peaks and troughs is set at $52.80

Express Scripts, Inc. (NASDAQ:ESRX) is a full service pharmacy benefit management and specialty managed care company. The Company serves managed care organizations, insurance carriers, third party administrators, employers, and union-sponsored benefit plans.

Express Scripts 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 Express Scripts price action, as any movement outside its predefined range of $50.14 and $52.80 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 $50.14 could spark above average selling. A tiered approach can be a good way to approach starting a position in Express Scripts, 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.