Coca Cola Short term Bullish Reversal

Published on Tuesday, 07 September 2010 00:27 Written by TradersHuddle Staff

New York, September 7th (TradersHuddle.com) - Shares of Coca Cola Co. (NYSE:KO) ended the trading session higher by $0.18 or 0.31% from its previous close. Coca Cola'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.

The Coca-Cola Company (NYSE:KO) manufactures, markets, and distributes soft drink concentrates and syrups. The company also distributes and markets juice and juice-drink products. Coca-Cola, which owns one of the most valuables brands in the world, sells its finished beverage products primarily to distributors, and beverage concentrates and syrups to bottling and canning operators. The Coca-Cola Company was founded in 1886 and is based in Atlanta, GA.

Coca Cola's recent stock range has been formed by a trough where calculated support was defined at $49.47 and by a peak that established the resistance level at $55.31, which could be used by traders planning their trades.

Traders wanting to establish a position in Coca Cola 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: