Range Tightening in SCANA

Published on Sunday, 15 August 2010 21:04 Written by TradersHuddle Staff

New York, August 15th (TradersHuddle.com) - Shares of SCANA Corporation (NYSE:SCG) closed the trading session at $38.61 placing the price action in a very tight range, given that calculated support is set at $38.05 and the calculated resistance based on an algorithm of peaks and troughs is set at $39.99

SCANA Corporation (NYSE:SCG) is a holding company involved in regulated electric and natural gas utility operations, telecommunications, and other energy-related businesses. The Company serves electric customers in South Carolina and natural gas customers in South Carolina, North Carolina, and Georgia.

SCANA's stock price action indicates that both sellers and buyers are materializing very close to each other, which is indicative to a momentum building area, as the stock can resolve by breaking out of the tight range that developed.

Traders wanting to establish a position should place close attention to SCANA's price action, as any movement outside its predefined range of $38.05 and $39.99 could grab the attention of momentum buyers, looking for a big movement in the price of the stock. Traders need to be aware that tight range resolution works both ways, hence, a move below support at $38.05 could spark above average selling. A tiered approach can be a good way to approach starting a position in SCANA's, by establishing a starter position while the stock is in the tight range, and then adding to the position as it breaks and closes above resistance.