How to Play IMAX

Published on Tuesday, 27 July 2010 07:20 Written by Danny Miller

New York, July 27th (TradersHuddle.com) - Shares of Imax Corporation (NASDAQ:IMAX) closed the trading session at $14.87 near its 50 day and 200 day moving averages currently set at $15.53 and $14.29 respectively. IMAX's price action is above the 200 day moving average but below its 50 day moving average, signaling a possible break out.

Imax Corporation (NASDAQ: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.

IMAX 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 IMAX with a small position and wait for the stock to break out above the 50 day moving average at $15.53, 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 $14.29 breaks it could mean further downside in the horizon for IMAX.