Bears taking over - Omnicare?

Published on Friday, 25 November 2011 04:06 Written by Christian Paolinetti

New York, November 25th (TradersHuddle.com) - Omnicare, Inc. (NYSE:OCR) shares closed the session higher by $0.09 or 0.3% from its previous close. Omnicare'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.

Omnicare, Inc. (NYSE:OCR), based in Covington, Kentucky, is a leading provider of pharmaceutical care for the elderly. Omnicare serves residents in long-term care facilities, chronic care and other settings in 47 states, the District of Columbia and Canada. Omnicare is the largest U.S. provider of professional pharmacy, related consulting and data management services for skilled nursing, assisted living and other institutional healthcare providers as well as for hospice patients in homecare and other settings. Its pharmacy services also include distribution and patient assistance services for specialty pharmaceuticals. Omnicare also offers clinical research services for the pharmaceutical and biotechnology industries in 31 countries worldwide.

Omnicare's stock has been a defined range with support at $29.16 and resistance at $31.38, 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 Omnicare 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: