GlaxoSmithKline in a Well Defined Range

Published on Thursday, 09 February 2012 06:52 Written by TradersHuddle Wire

New York, February 9th (TradersHuddle.com) - Shares of GlaxoSmithKline plc (NYSE:GSK) closed the trading session at $44.35 near its 50 day and 200 day moving averages currently set at $44.86 and $43.27 respectively. GlaxoSmithKline's price action is above the 200 day moving average but below its 50 day moving average, signaling a possible break out.

GlaxoSmithKline plc (NYSE:GSK) is a research-based pharmaceutical group that develops, manufactures and markets vaccines, prescription and over-the-counter medicines, as well as health-related consumer products. Its over the counter medicines and health related consumer products are marketed under brand names like Panadol, Nicorette, Breathe Right, Tums, Aquafresh, and Sensodyne among others.

GlaxoSmithKline price action seems to be setting up for a tight range between the 200 day moving average as support and the 50 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 GlaxoSmithKline with a small position and wait for the stock to break out above the 50 day moving average at $44.86, where traders could add to their position as momentum builds with the breakout. The flip side will be if support being referenced at the 200 day moving average set at $43.27 breaks it could mean further downside in the horizon for GlaxoSmithKline.