Close to Key Levels: Emerson

Published on Thursday, 18 October 2012 06:44 Written by TradersHuddle Wire

New York, October 18th (TradersHuddle.com) - Emerson Electric Co. (NYSE:EMR) closed the trading day at $49.31, near its 50 day and 200 day moving averages set at $50.00 and $49.20 respectively. Emerson's price action placed the stock above the 200 day moving average but below its 50 day moving average, a setup that signals a possible break out.

Emerson Electric Co. (NYSE:EMR) manufactures and markets electrical, electromechanical, and electronic products and systems. The Company produces a variety of products, including process control, industrial automation, electronics, appliance components, and electric motors. The company was founded in 1890 and is based in St. Louis, Missouri.

Emerson 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, appears to be the best strategy to maximize possible movements in the stock, as traders could establish a small position in Emerson and wait for the stock to break out above its 50 day moving average at $50.00. Then they could add to the position as momentum builds with the breakout. On the flip side, if support being referenced at the 200 day moving average set at $49.20 breaks, it could signal further downside pressure for Emerson.