EMC Corporation (EMC) Is Trading Close To Its Resistance

EMC Corporation (NYSE: EMC) gapped lower on January 29th after the company reported lower than expected guidance for 2013. The 4Q results were better than expected as EMC reported earnings per share of $0.54 vs expected $0.52.

On January 29th, the stock opened the trading session 6.15% lower, dropping from $25.20 to $23.65. Its lowest price of the day was $23.11, which was a decline of 8.29%. The sell-off lasted for only 30 minutes and as soon as the volume started to decline the price jumped higher. It took three days for the stock to close near $25 and we can now say that EMC is close to fill the gap. This stock is highly recommended by analysts and this could be a reason for the recovery and high volume. The average price target is $29.49, which is well above the current price of $24.85. There are 13 strong buy recommendations, 20 buy and 5 hold recommendations. Monness Crespi & Hardt upgraded the stock from neutral to buy on January 29th, which also helped the stock to recover.

In the last two trading sessions EMC gapped higher twice. On January 31st, it jumped from $24.60 to $24.72, the low of the day was $24.52 and the high was $24.97. On February 1st, price increased from $24.61 to $24.79, the low of the day was $24.67 and the high was $24.95. It looks to me that the price level of $24.60 is a support and a retreat to this price could be considered as a buying opportunity. On the other hand, $24.97 is the first significant resistance and a close above that price is needed for EMC to continue higher. The other significant resistance is $25.20.

It is also important to mention that this stock bottomed several times in a price range between $23.11 and $23.58. On November 16th, EMC reached $23.23 and it bounced to $26.20 in a month. The stock bottomed again at $23.58 on January 8th and the last visit to these levels happened on Tuesday.

Disclaimer: I don't have a position in EMC. The material on this website is not an investment advice. I do not provide investment advices. Before investing you should consider risks.