Bulls taking over - Coventry Health Care?

Published on Sunday, 27 November 2011 21:09 Written by TradersHuddle Staff

New York, November 27th (TradersHuddle.com) - Shares of Coventry Health Care, Inc. (NYSE:CVH) ended the trading session higher by $0.08 or 0.27% from its previous close. Coventry's price action developed what can be considered a reversal pattern in the form of a tweezer bottom, which is a candlestick pattern that is usually formed at the end of a downtrend. The tweezer bottom is considered a reversal pattern, so traders will need to monitor the the price action for confirmation.

Coventry Health Care, Inc. (NYSE:CVH) is a managed health care company operating health plans and insurance companies under a variety of names. The Company provides health maintenance organization, preferred provider organization, point of service, Medicare and Medicaid, and Network Rental to members in markets throughout the Midwest, Mid-Atlantic, and Southeast.

Traders looking for an entry in Coventry Health Care can use the tweezers as a good reference point to establish the long position, as the pattern provides defined risk by giving a good reference point for support.

Traders are always looking for tweezer bottoms as they give an entry with a small risk defined, they are a leading indicator that provides an alert for a trend reversal or stabilization. The tweezers imply that bears or sellers were not able to push the stock lower, therefore providing the opportunity to look for a bounce. Below an example of Tweezer Bottom reversal patterns: