Trading Idea - Is Moody's close to Resistance?

Published on Thursday, 02 September 2010 08:36 Written by Christian Paolinetti

New York, September 2nd (TradersHuddle.com) - Shares of Moody's Corporation (NYSE:MCO) are trading very close to calculated resistance at $22.26 with the current price action closing at just $21.95 placing the stock near levels that make it difficult to buy.

Moody's Corporation (NYSE:MCO) is a credit rating, research, and risk analysis firm. The Company provides credit ratings and related research, data and analytical tools, quantitative credit risk measures, risk scoring software, and credit portfolio management solutions and securities pricing software and valuation models.

Moody's current stock range is defined by current calculated support defined at $20.72 and by the resistance level at $22.26, 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 Moody's, as the stock is well above support, however, as the stock pulls back towards $20.72 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 $22.26 then traders will get an opportunity to enter Moody's stock by establishing a position as the stock moves to a higher range.