Brocade Is Near a Key Resistance Area

Published on Wednesday, 23 January 2013 07:20 Written by TradersHuddle Wire

New York, January 23rd (TradersHuddle.com) - Shares of Brocade Communications Systems, Inc. (NASDAQ:BRCD) are trading very close to calculated resistance at $5.73. The stock ended the trading session at just $5.64, which is near levels that make it difficult to buy or start a position.

Brocade Communications Systems, Inc. (NASDAQ:BRCD) provides switching solutions for storage area networks. Its family of SilkWorm switches enables a company to manage growth of its data storage requirements, improve the data transfer performance, and increase the size of its storage area networks.

Brocade's stock range is defined by its calculated support defined at $5.36 and by the resistance level at $5.73; the stock is clearly over-extended from support, making it harder for participants to establish fresh longs.

Traders don't have a clear entry point for Brocade. However, as the stock pulls back towards $5.36 it will definitely provide a reference point to establish a trade. On the other hand, if the stock breaks above its resistance level at $5.73 then traders will get an opportunity to enter the stock as it moves to a higher range.