Kellogg Ready for a Break Out?

Published on Wednesday, 08 February 2012 06:56 Written by TradersHuddle Wire

New York, February 8th (TradersHuddle.com) - Shares of Kellogg Company (NYSE:K ) closed the trading session at $50.82 near its 50 day and 200 day moving averages currently set at $50.05 and $53.17 respectively. Kellogg's price action is above the 50 day moving average but below its 200 day moving average, which provide a nice trading setup, with clear reference points.

Kellogg Company (NYSE:K ) manufactures and markets ready-to-eat cereal and other convenience foods. The Company's products include cereals, cookies, crackers, toaster pastries, cereal bars, fruit snacks, frozen waffles and veggie foods. Kellogg markets its products in countries around the world.

Kellogg price action seems to be setting up for a tight range between the 50 day moving average as support and the 200 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 Kellogg with a small position and wait for the stock to break out above the 200 day moving average at $53.17, where traders could add to their position as momentum builds with the breakout. The flip side will be if support being referenced at the 50 day moving average set at $50.05 breaks it could mean further downside in the horizon for Kellogg.