Trading Idea - Is Avnet close to Resistance?

Published on Monday, 06 February 2012 20:08 Written by TradersHuddle Staff

New York, February 6th (TradersHuddle.com) - Shares of Avnet, Inc. (NYSE:AVT) are trading very close to calculated resistance at $36.57 with the current price action closing at just $36.09 placing the stock near levels that make it difficult to buy.

Avnet, Inc. (NYSE:AVT) distributes computer products and semiconductors, as well as interconnect, passive, and electromechanical components. The Company markets, inventories, and adds value to these products and provides supply-chain integration, engineering design, and technical services. Avnet serves customers in countries around the world.

Avnet's current stock range is defined by current calculated support defined at $30.20 and by the resistance level at $36.57, the stock is clearly over-extended from support, making it difficult to establishing new long positions at this level.

Traders don't have a clear entry point for Avnet, as the stock is well above support, however, as the stock pulls back towards $30.20 it will definitely provide a reference point to establish a trade. On the other hand if the stock decides to break above resistance level at $36.57 then traders will get an opportunity to enter Avnet stock by establishing a position as the stock moves to a higher range.