Dean Foods Broke Support

Published on Friday, 27 August 2010 07:28 Written by TradersHuddle Staff

New York, August 27th (TradersHuddle.com) - Shares of Dean Foods Company (NYSE:DF) closed the trading session at $9.72 below calculated support at $9.77 breaking the stock technically, raising concerns by investors, as the move might trigger more selling.

Dean Foods Company (NYSE:DF) is a food and beverage company that produces dairy and dairy-related products. The Company provides products such as milk and milk-based beverages, ice cream, half and half, whipping cream, sour cream, cottage cheese, yogurt, dips, and soy milk.

Dean Foods' stock was trading in a well defined range with support at $9.77 and resistance at $11.28; 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 Dean Foods' stock is still near the broken support, traders will be focusing on $9.77 to see if the stock can bounce back and return to its previous range.

Traders wanting to establish a short position in Dean Foods can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes again at previous support of $9.77. 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.