Vmware Is in a Well Structured Setup

Published on Tuesday, 22 January 2013 06:00 Written by TradersHuddle Wire

New York, January 22nd (TradersHuddle.com) - VMware, Inc. (NYSE:VMW) closed the trading day at $93.81, near its 50 day and 200 day moving averages set at $92.02 and $94.57 respectively. Vmware'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.

VMware, Inc. (NYSE:VMW) provides virtualization solutions for the desktop computer and data centers. Its solution products address a range of IT problems, which include cost and operational inefficiencies, business continuity, software lifecycle management and desktop management.

Vmware 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 Vmware and wait for the stock to break out above the 200 day moving average at $94.57. 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 $92.02 breaks, it could signal further downside for Vmware in the horizon.