Bullish Reversal Pattern - Avis Budget Group

Published on Thursday, 17 June 2010 18:15 Written by Danny Miller

New York, June 17th (TradersHuddle.com) - Shares of Avis Budget Group, Inc. (NYSE:CAR) ended the trading session higher by $0.06 or 0.52% from its previous close. Avis Budget Group's price action in today's session formed what is considered to be a Hammer, where bears drove prices lower intraday. However, the strong finish indicates that bulls regained control forming a trend reversal.

Avis Budget Group, Inc. (NYSE:CAR) provides car and truck rentals to businesses and consumers around the world. The company supplies rental cars to the premium commercial and leisure segments of the travel industry under the Avis brand name; and to the price-conscious segments of the industry under the Budget brand name.

Avis Budget Group's stock has been trading in a well defined range with support at $9.79 and resistance at $11.93, this range is also being used by traders to plan their positions.

Traders wanting to establish a position in Avis Budget Group or traders that are already holding the stock can usecan use the hammer formation to their advantage, since the pattern signal a potential bullish trend reversal.

Hammers are important candlesticks as they mark bottoms and support levels. Further buying pressure, and preferably on expanding volume, is needed before acting, as heavy volume will serve to confirm the validity of the reversal.

In the case of Avis Budget Group, traders who want to add to their positions or start a new position, need to watch for confirmation of the reversal. Below a Hammer illustration: