Reference Points for Capital One

Published on Thursday, 02 February 2012 09:00 Written by TradersHuddle Staff

New York, February 2nd (TradersHuddle.com) - Shares of Capital One Financial Corporation (NYSE:COF) closed the trading session at $46.65 near its 50 day and 200 day moving averages currently set at $44.55 and $46.52 respectively. Capital One's price action is above these important levels, which could translate into a trading opportunity.

Capital One Financial Corporation (NYSE:COF) is a diversified bank. The Bank, through its subsidiaries, offers a broad spectrum of financial products and services, like credit cards and car loans to consumers, small businesses and commercial clients both domestically and internationally. Headquartered in McLean, Virginia, Capital One, N.A. has approximately 1,000 branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia and the District of Columbia.

Although the price action is above important moving averages, it's important to highlight that the 50 day moving average is currently below the 200 day moving average resulting in not a prime setup where buying the dip will present a good trading opportunity.

Looking at peaks and troughs horizontal support and resistance levels, we can see current calculated support at $44.65 and calculated resistance at $49.63. These levels should also be evaluated by traders when planning their trades, as they provide an insight into the latest price action.

If traders want to establish a position on Capital One, should evaluate their trade, as it will certainly be better to wait, given that the stock is technically broken with the 50 day moving average trading below the 200 day moving average. Traders can also look at the current range defined by the peaks and troughs see where the current price action of stock is and establish a short trade versus those levels.