Playing the Setup in Baxter International

Published on Thursday, 05 July 2012 06:40 Written by TradersHuddle Wire

New York, July 5th (TradersHuddle.com) - Baxter International, Inc. (NYSE:BAX) closed the trading day at $54.22, near its 50 day and 200 day moving averages currently set at $52.40 and $54.06 respectively. Baxter's price action placed the stock above these important levels, which could translate into a trading opportunity.

Baxter International Inc. (NYSE:BAX) develops, manufactures, and markets products and technologies related to hemophilia, immune disorders, infectious diseases, kidney disease, trauma and other chronic medical conditions. The healthcare products are used by hospitals, kidney dialysis centers, nursing homes, rehabilitation centers, doctors' offices, and research laboratories.

Although, the price is above important moving averages, it's important to highlight that this is not a prime setup for buying the dip strategy, as the 50 day moving average is currently below the 200 day moving average.

The peaks and troughs algorithm shows calculated support at $49.73 and resistance at $52.18. These levels should also be evaluated by traders when planning their next move, as they provide an insight into the latest price action.

If traders want to establish a long position in Baxter International, it will certainly be better to wait, given that the stock is technically broken with the 50 day moving average trading below the 200 day moving average. Traders can also look at the current range defined by the peaks and troughs to establish a short trade versus those levels.