Bucyrus Short term Bullish Reversal

Published on Wednesday, 01 September 2010 02:18 Written by Danny Miller

New York, September 1st (TradersHuddle.com) - Shares of Bucyrus International, Inc. (NASDAQ:BUCY) ended the trading session higher by $1.24 or 2.2% from its previous close. Bucyrus' 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.

Bucyrus International, Inc. (NASDAQ:BUCY) manufactures and markets large excavation machinery used for surface mining. The Company also supplies replacement parts and machinery. Its principal products include large walking draglines, electric mining shovels and blast hole drills, which are used by customers who mine coal, iron ore, copper, and other minerals.

Bucyrus' recent stock range has been formed by a trough where calculated support was defined at $53.04 and by a peak that established the resistance level at $62.11, which could be used by traders planning their trades.

Traders wanting to establish a position in Bucyrus 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: