Bulls taking over - AVX?

Published on Monday, 16 August 2010 18:15 Written by TradersHuddle Staff

New York, August 16th (TradersHuddle.com) - Shares of AVX Corporation (NYSE:AVX) ended the trading session lower by $0.03 or -0.22% from its previous close. AVX's price action developed what can be considered a reversal pattern in the form of a tweezer bottom, which is a candlestick pattern that is usually formed at the end of a downtrend. The tweezer bottom is considered a reversal pattern, so traders will need to monitor the the price action for confirmation.

AVX Corporation (NYSE:AVX) manufactures and supplies a variety of passive electronic components and related products. Its products include ceramic and tantalum capacitors which are used in many electronic products to store, filter, or regulate electric energy. AVX supplies original equipment manufacturers in various industries. As of January 18, 1990, AVX Corp. operates as a subsidiary of Kyocera Corporation.

Traders looking for an entry in AVX can use the tweezers as a good reference point to establish the long position, as the pattern provides defined risk by giving a good reference point for support.

Traders are always looking for tweezer bottoms as they give an entry with a small risk defined, they are a leading indicator that provides an alert for a trend reversal or stabilization. The tweezers imply that bears or sellers were not able to push the stock lower, therefore providing the opportunity to look for a bounce. Below an example of Tweezer Bottom reversal patterns: