Is HSBC Waiting for a Break Out?

Published on Tuesday, 19 March 2013 09:12 Written by TradersHuddle Wire

New York, March 19th (TradersHuddle.com) - HSBC Holdings plc (NYSE:HBC) ended the trading session at $54.42, near its 50 day moving average set at $55.23. HSBC's price action placed the stock below this important level, which makes it difficult to be bought, as the stock will certainly face resistance as it approaches its 50 day moving average.

HSBC Holdings plc (NYSE:HBC) is the holding company for the HSBC Group. The Financial firm provides a variety of international banking and financial services, including retail and corporate banking, trade, trusteeship, securities, custody, capital markets, treasury, private and investment banking, and insurance. The Group is headquartered in London and operates worldwide. The firm is the largest lender in Europe and one of the largest banking institutions worldwide, with the most emerging markets exposure.

The latest price action range, defined by a peaks and troughs algorithm, placed calculated support at $53.90 and resistance at $57.37. These levels will be closely monitored, as they provide great insight into the latest price dynamics.

If traders want to establish a position in HSBC, given the resistance expected as the stock approaches its 50 day moving average, a trade might materialize as the stock manages to break this important technical level. After the breakout, the 50 day moving average could be used as support going forward. However, until the break materializes, buying the stock is basically a gamble with 50-50 chance.