Apache Short term Bullish Reversal

Published on Wednesday, 01 September 2010 02:36 Written by Danny Miller

New York, September 1st (TradersHuddle.com) - Shares of Apache Corporation (NYSE:APA) ended the trading session higher by $0.3 or 0.34% from its previous close. Apache'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.

Apache Corporation (NYSE:APA), together with its subsidiaries, engages in the exploration, development, and production of natural gas, crude oil, and natural gas liquids. The company sells its natural gas to local distribution companies, utilities, end-users, integrated oil and gas companies, and marketers; and crude oil to integrated oil companies, purchasers, transporters, and refiners.

Apache's recent stock range has been formed by a trough where calculated support was defined at $85.35 and by a peak that established the resistance level at $91.06, which could be used by traders planning their trades.

Traders wanting to establish a position in Apache 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: