ProLogis in a very Tight Range

Published on Thursday, 09 September 2010 05:16 Written by Christian Paolinetti

New York, September 9th (TradersHuddle.com) - Shares of ProLogis (NYSE:PLD) closed the trading session at $11.15 placing the price action in a very tight range, given that calculated support is set at $10.92 and the calculated resistance based on an algorithm of peaks and troughs is set at $11.5

ProLogis (NYSE:PLD) provides distribution facilities and services. The Company has distribution facilities owned, managed, and under development in various markets throughout North America, Europe, and Asia. ProLogis leases industrial space to a wide variety of end uses, including distribution and manufacturing.

ProLogis' 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 ProLogis' price action, as any movement outside its predefined range of $10.92 and $11.5 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 $10.92 could spark above average selling. A tiered approach can be a good way to approach starting a position in ProLogis', 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.