Playing the Setup in IMAX

Published on Thursday, 09 August 2012 08:24 Written by TradersHuddle Wire

New York, August 9th (TradersHuddle.com) - Imax Corporation (NYSE:IMAX) closed the the trading session at $21.67, near its 50 day and 200 day moving averages currently set at $22.55 and $22.10 respectively. IMAX's price action places the stock below these important levels, which makes it difficult to be bought, as it will certainly face resistance as it approaches these important moving averages.

Imax Corporation (NYSE:IMAX) specializes in motion picture technologies and large-format film presentations. The company designs and manufactures projection and sound systems for large-screen theaters and designs custom attractions, including motion simulation theaters, for both large-scale attractions and smaller venues.

The latest price action range, defined by a peaks and troughs algorithm, placed calculated support at $21.11 and resistance at $25.99. Traders should monitor these levels, as they provide insight into the latest price dynamics in IMAX.

If traders want to establish a position on IMAX, given the heavy resistance expected near the 50 and 200 day moving averages, a trade might be evident as the stock manages to break these moving averages. However, until the break materializes buying the stock is nothing different than flipping a coin.