Below Support- U.S. Bancorp

Published on Tuesday, 31 August 2010 06:20 Written by Danny Miller

New York, August 31st (TradersHuddle.com) - Shares of U.S. Bancorp (NYSE:USB) closed the trading session at $20.71 below calculated support at $20.89 breaking current long setups, raising concerns by the bulls, as this move might give the bears the upper hand.

U.S. Bancorp (NYSE:USB) is a diversified financial services company that provides lending and depository services, and cash management. The Company also provides credit card services, mortgage banking, insurance, brokerage, and leasing. U.S Bancorp operates in the Midwest and Western United States.

U.S. Bancorp's stock was trading in a well defined range with support at $20.89 and resistance at $24.48; 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 U.S. Bancorp's stock is still near the broken support, traders will be focusing on $20.89 to see if the stock can bounce back and return to its previous range.

Traders wanting to establish a short position in U.S. Bancorp can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes again at previous support of $20.89. 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.