Is FLIR Systems Setting up for a Break Out?

Published on Wednesday, 08 February 2012 07:56 Written by TradersHuddle Wire

New York, February 8th (TradersHuddle.com) - Shares of FLIR Systems, Inc. (NASDAQ:FLIR) closed the trading session at $25.79 placing the price action in a very tight range, given that calculated support is set at $25.54 and the calculated resistance based on an algorithm of peaks and troughs is set at $27.06

FLIR Systems, Inc. (NASDAQ:FLIR) designs, manufactures, and markets thermal imaging and broadcast camera systems for a variety of applications in the commercial and government markets.

FLIR's 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 FLIR's price action, as any movement outside its predefined range of $25.54 and $27.06 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 $25.54 could spark above average selling. A tiered approach can be a good way to approach starting a position in FLIR's, 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.