Bulls taking Control - Aeropostale?

Published on Thursday, 26 August 2010 00:45 Written by Danny Miller

New York, August 26th (TradersHuddle.com) - Shares of Aeropostale, Inc. (NYSE:ARO) ended the trading session higher by $0.51 or 2.31% from its previous close. Aeropostale'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.

Aeropostale?s (NYSE:ARO) principal activity is to retail casual apparel and accessories for both young women and young men aged eleven to twenty. The company offers a focused collection of fashion basic apparel, graphic t-shirts, tops, bottoms, sweaters, jeans, outerwear and accessories. It also provides customers with a focused selection of active-oriented, fashion basic merchandise at compelling values. Trademarks include AEROPOSTALE and AERO. The company has operations in Alabama, Arkansas, Colorado, Georgia, Indiana, Iowa and other states.

Aeropostale's recent stock range has been formed by a trough where calculated support was defined at $22.45 and by a peak that established the resistance level at $23.99, which could be used by traders planning their trades.

Traders wanting to establish a position in Aeropostale 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: