Trading Idea - Is Pulte close to Resistance?

Published on Monday, 30 August 2010 07:04 Written by Christian Paolinetti

New York, August 30th (TradersHuddle.com) - Shares of Pulte Homes, Inc. (NYSE:PHM) are trading very close to calculated resistance at $8.50 with the current price action closing at just $8.17 placing the stock near levels that make it difficult to buy.

Pulte Homes, Inc. (NYSE:PHM) constructs and develop residential and active adult communities. The Company also provides mortgage financing, title insurance, and other services to home buyers. Pulte has operations in various markets across the United States and Puerto Rico.

Pulte's current stock range is defined by current calculated support defined at $7.70 and by the resistance level at $8.50, the stock is clearly over-extended from support, making it difficult to establishing new long positions at this level.

Traders don't have a clear entry point for Pulte , as the stock is well above support, however, as the stock pulls back towards $7.70 it will definitely provide a reference point to establish a trade. On the other hand if the stock decides to break above resistance level at $8.50 then traders will get an opportunity to enter Pulte stock by establishing a position as the stock moves to a higher range.