Quanta Services Broke Support

Published on Wednesday, 25 August 2010 06:12 Written by TradersHuddle Staff

New York, August 25th (TradersHuddle.com) - Shares of Quanta Services, Inc. (NYSE:PWR) closed the trading session at $18.18 below calculated support at $18.56 breaking current long setups, raising concerns by the bulls, as this move might give the bears the upper hand.

Quanta Services, Inc. (NYSE:PWR) provides specialized contracting services to electric utilities, telecommunication and cable television operators, and governmental entities. The Company also installs transportation control and lighting systems and provides specialty electric power and communication services for industrial and commercial customers.

Quanta's stock was trading in a well defined range with support at $18.56 and resistance at $19.65; given that this range was broken traders will be closely monitoring the stock?s price action for clues of direction.

From a technical perspective it can be expected that previous support becomes resistance, as the new range gets defined, however, given that Quanta's stock is still near the broken support, traders will be focusing on $18.56 to see if the stock can bounce back and return to its previous range.

Traders wanting to establish a short position in Quanta Services can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes again at previous support of $18.56. For traders wanting to establish a long position, wait for price action to take the stock back to calculated support, which will provide a best entry point to build the position.