Is Express Scripts Setting up for a Break Out?

Published on Monday, 30 August 2010 06:00 Written by Christopher Lynn

New York, August 30th (TradersHuddle.com) - Shares of Express Scripts, Inc. (NASDAQ:ESRX) closed the trading session at $44.72 placing the price action in a very tight range, given that calculated support is set at $44.10 and the calculated resistance based on an algorithm of peaks and troughs is set at $46.72

Express Scripts, Inc. (NASDAQ:ESRX) is a full service pharmacy benefit management and specialty managed care company. The Company serves managed care organizations, insurance carriers, third party administrators, employers, and union-sponsored benefit plans.

Express Scripts 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 Express Scripts price action, as any movement outside its predefined range of $44.10 and $46.72 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 $44.10 could spark above average selling. A tiered approach can be a good way to approach starting a position in Express Scripts, 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.