Tweezer top in Spectra Energy

Published on Tuesday, 13 July 2010 18:21 Written by Christian Paolinetti

New York, July 13th (TradersHuddle.com) - Spectra Energy Corporation (NYSE:SE) shares closed the session higher by $0.01 or 0.05% from its previous close. Spectra's latest price action developed a short term reversal pattern in the form of a tweezer top, which is a candlestick pattern that is usually formed at the end of a uptrend. Given that the tweezer top is considered a reversal pattern, traders with long positions need to monitor stock price action for confirmation of weakness and plan position accordingly.

Spectra Energy Corporation (NYSE:SE) transmits, stores, distributes, gathers, and processes natural gas. The Company provides transportation and storage of natural gas to customers in various regions of the northeastern and southeastern United States, the Maritime Provinces in Canada and the Pacific Northwest in the United States and Canada, and the province of Ontario, Canada.

Spectra's stock has been a defined range with support at $19.67 and resistance at $22.12, which can be used by traders managing their trades, given the possibility of short term weakness in the stock.

Tweezer tops are exactly the opposite of tweezer bottoms, as they define a resistance point for Spectra Energy that needs to be digested prior to the stock price to move higher.

Tweezer tops can be formed at the end of an uptrend, at a clear horizontal resistance point, or within a downtrend when price action is dealing with the declining resistance trend. Like any other candlestick pattern it needs confirmation by trading below the previous day low. Below an example of Tweezer Top reversal patterns: