Tweezer top in Quanta Services

Published on Thursday, 02 September 2010 01:06 Written by TradersHuddle Staff

New York, September 2nd (TradersHuddle.com) - Quanta Services, Inc. (NYSE:PWR) shares closed the session higher by $0.51 or 2.84% from its previous close. Quanta's latest price action developed a short term reversal pattern in the form of a tweezer top, which is a candlestick pattern that is usually formed at the end of a uptrend. Given that the tweezer top is considered a reversal pattern, traders with long positions need to monitor stock price action for confirmation of weakness and plan position accordingly.

Quanta Services, Inc. (NYSE:PWR) provides specialized contracting services to electric utilities, telecommunication and cable television operators, and governmental entities. The Company also installs transportation control and lighting systems and provides specialty electric power and communication services for industrial and commercial customers.

Quanta's stock has been a defined range with support at $17.80 and resistance at $19.65, which can be used by traders managing their trades, given the possibility of short term weakness in the stock.

Tweezer tops are exactly the opposite of tweezer bottoms, as they define a resistance point for Quanta Services that needs to be digested prior to the stock price to move higher.

Tweezer tops can be formed at the end of an uptrend, at a clear horizontal resistance point, or within a downtrend when price action is dealing with the declining resistance trend. Like any other candlestick pattern it needs confirmation by trading below the previous day low. Below an example of Tweezer Top reversal patterns: