Bears taking over - EOG Resources?

Published on Wednesday, 04 August 2010 03:15 Written by TradersHuddle Staff

New York, August 4th (TradersHuddle.com) - EOG Resources, Inc. (NYSE:EOG) shares closed the session lower by $0.81 or -0.79% from its previous close. EOG Resources' 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.

EOG Resources, Inc. (NYSE:EOG) develops, produces and markets natural gas and crude oil. The Company operates in major producing basins in the United States, Canada, Trinidad, the United Kingdom North Sea, and China

EOG Resources' stock has been a defined range with support at $97.14 and resistance at $108.47, 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 EOG Resources 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: