Good Setup Developing in WellPoint
Published on Tuesday, 25 December 2012 06:48 Written by TradersHuddle Wire
New York, December 25th (TradersHuddle.com) - WellPoint Inc. (NYSE:WLP) closed the trading day at $61.07, near its 50 day and 200 day moving averages set at $58.75 and $62.59 respectively. WellPoint's price action placed the stock above the 50 day moving average but below its 200 day moving average, providing a nice trading setup with clear reference points.
WellPoint Inc. (NYSE:WLP) is a health benefits company. The Company provides health, dental and vision benefits, pharmacy benefits, life insurance, and life and disability insurance benefits. WellPoint operations include Blue Cross and Blue Shield plans.
WellPoint seems to be setting up for a tight range between the 50 day moving average as support and the 200 day moving average serving as resistance.
A tiered approach appears to be the best way to maximize possible movements in the stock, as traders could establish a small position in WellPoint and wait for the stock to break out above the 200 day moving average at $62.59. Then they could add to the position as momentum builds with the breakout. On the other hand, if support being referenced at the 50 day moving average set at $58.75 breaks, it could signal further downside for WellPoint in the horizon.
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