Is this a Reversal Pattern for Aecom ?

Published on Sunday, 29 August 2010 00:24 Written by TradersHuddle Staff

New York, August 29th (TradersHuddle.com) - Shares of Aecom Technology Corp. (NYSE:ACM) ended the trading session higher by $0.3 or 1.32% from its previous close. Aecom's price action in today's session formed what is considered to be a Hammer, where bears drove prices lower intraday. However, the strong finish indicates that bulls regained control forming a trend reversal.

Aecom Technology Corp. (NYSE: ACM) is a global provider of professional technical and management support services to a broad range of markets, including transportation, facilities, environmental, energy, water and government. Its services include consulting, planning, architecture, engineering, construction management, project management, asset management, environmental services, and design-build services.

Aecom's stock has been trading in a well defined range with support at $22.02 and resistance at $26.61, this range is also being used by traders to plan their positions.

Traders wanting to establish a position in Aecom or traders that are already holding the stock can use the hammer formation to their advantage, since the pattern signal a potential bullish trend reversal.

Hammers are important candlesticks as they mark bottoms and support levels. Further buying pressure, and preferably on expanding volume, is needed before acting, as heavy volume will serve to confirm the validity of the reversal.

In the case of Aecom, traders who want to add to their positions or start a new position, need to watch for confirmation of the reversal. Below a Hammer illustration: