Is There Resistance Above for SAIC?

Published on Wednesday, 20 June 2012 06:20 Written by TradersHuddle Wire

New York, June 20th (TradersHuddle.com) - SAIC, Inc. (NYSE:SAI) closed the trading day at $11.76, near its 50 day and 200 day moving averages set at $11.53 and $12.30 respectively. SAIC's price action placed the stock above the 50 day moving average but below its 200 day moving average, providing a nice trading setup with clear reference points.

SAIC, Inc. (NYSE:SAI) provides scientific, engineering, systems integration and technical services and solutions in such areas as national security, intelligence and homeland defense.

SAIC 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 appears to be the best way to maximize possible movements in the stock, as traders could establish a small position in SAIC and wait for the stock to break out above the 200 day moving average at $12.30. Then they could add to the position as momentum builds with the breakout. On the other hand, if support being referenced at the 50 day moving average set at $11.53 breaks, it could signal further downside for SAIC in the horizon.