Trading Idea - Is Massey close to Resistance?

Published on Wednesday, 21 July 2010 06:44 Written by TradersHuddle Staff

New York, July 21st (TradersHuddle.com) - Shares of Massey Energy Company (NYSE:MEE) are trading very close to calculated resistance at $30.59 with the current price action closing at just $29.33 placing the stock near levels that make it difficult to buy.

Massey Energy Company (NYSE:MEE) produces, processes, and sells bituminous, low sulfur coal of steam and metallurgical grades. The Company currently operates coal mines in West Virginia, Kentucky, and Virginia. Massey provides its coal to utility, industrial, and metallurgical customers.

Massey's current stock range is defined by current calculated support defined at $25.85 and by the resistance level at $30.59, the stock is clearly over-extended from support, making it difficult to establishing new long positions at this level.

Traders don't have a clear entry point for Massey, as the stock is well above support, however, as the stock pulls back towards $25.85 it will definitely provide a reference point to establish a trade. On the other hand if the stock decides to break above resistance level at $30.59 then traders will get an opportunity to enter Massey stock by establishing a position as the stock moves to a higher range.