Is Mastercard Ready for a Rest?

Published on Thursday, 09 February 2012 06:12 Written by TradersHuddle Wire

New York, February 9th (TradersHuddle.com) - Shares of MasterCard, Inc. (NYSE:MA) closed the trading day at $394.91 well above its calculated resistance at $354.94, which was calculated from a peak and throughs algorithm, making traders worry about a possible pull back in the stock price.

MasterCard, Inc. (NYSE:MA) is a global payment solutions company that provides a variety of services in support of the credit, debit and related payment programs of financial institutions. The Company offers transaction processing services for credit and debit cards, electronic cash, automated teller machines, and travelers checks.

Mastercard's stock broke out of its defined range that had support at $336.26 and resistance at $354.94. Now the stock is working on developing a new trading range, which should be defined by the high setup after this breakout and its probable support, which could be its previous resistance level $354.94.

From a technical perspective traders should wait to establish a position in Mastercard until a base in the stock develops that can provide good reference points to the upside and most importantly to the downside, for traders have a risk reference point before entering into a position on Mastercard stock.