Trading Idea - Is Smithfield Foods close to Resistance?

Published on Wednesday, 28 July 2010 02:08 Written by Christopher Lynn

New York, July 28th (TradersHuddle.com) - Shares of Smithfield Foods, Inc. (NYSE:SFD) are trading very close to calculated resistance at $15.29 with the current price action closing at just $14.94 placing the stock near levels that make it difficult to buy.

Smithfield Foods, Inc. (NYSE:SFD) engages in the production and marketing of fresh meat and packaged meat products. The company processes pork and produces hogs through its meat processing and hog production groups. Smithfield also produces and markets a range of branded food products such as frozen barbecues and chilies, peanuts, and pork products.

Smithfield Foods' current stock range is defined by current calculated support defined at $13.78 and by the resistance level at $15.29, 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 Smithfield Foods, as the stock is well above support, however, as the stock pulls back towards $13.78 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 $15.29 then traders will get an opportunity to enter Smithfield Foods stock by establishing a position as the stock moves to a higher range.