PPL Upside Looming?

Published on Tuesday, 27 July 2010 02:39 Written by TradersHuddle Staff

New York, July 27th (TradersHuddle.com) - Shares of PPL Corporation (NYSE:PPL) ended the trading session higher by $0.16 or 0.6% from its previous close. PPL's price action formed what is considered to be a bullish engulfing candle that could very well signal continuation of trend or reversal on ongoing weakness.

PPL Corporation (NYSE:PPL) is an energy and utility holding company. The Company, through its subsidiaries, generates electricity from power plants in the northeastern and western United States, and markets wholesale and retail energy primarily in the northeastern and western portions of the United States, and delivers electricity in Pennsylvania and the United Kingdom.

PPL's recent stock range has been formed by a trough where calculated support was defined at $24.23 and by a peak that established the resistance level at $26.62, which could be used by traders planning their trades.

Traders wanting to establish a position in PPL or traders that are already holding the stock can use the bullish engulfing pattern to their advantage. The pattern provides a defined risk as it shows where the bears were able to push the stock down, before the bulls stepped in.

The bullish engulfing pattern is a leading indicator that provides an alert to the bulls that the trend will continue or that there is an immediate reversal to the short term weakness seen on the stock. Below an Engulfing Bullish Candle Illustration: