Good Setup in Xerox

Published on Friday, 03 September 2010 05:48 Written by Danny Miller

New York, September 3rd (TradersHuddle.com) - Shares of Xerox Corporation (NYSE:XRX) closed the trading session at $8.93 near its 50 day and 200 day moving averages currently set at $8.87 and $9.16 respectively. Xerox's price action is above the 50 day moving average but below its 200 day moving average, which provide a nice trading setup, with clear reference points.

Xerox Corporation (NYSE:XRX) develops, manufactures, markets, and services a range of document imaging and processing products and services for use in offices around the world.

Xerox price action seems to be setting up for a tight range between the 50 day moving average as support and the 200 day moving average serving as resistance.

A tiered approach to enter the stock, appears to be the best way to maximize possible movements from the stock, as traders could enter Xerox with a small position and wait for the stock to break out above the 200 day moving average at $9.16, where traders could add to their position as momentum builds with the breakout. The flip side will be if support being referenced at the 50 day moving average set at $8.87 breaks it could mean further downside in the horizon for Xerox.