SLM Short term Bullish Reversal

Published on Wednesday, 07 December 2011 04:39 Written by Christopher Lynn

New York, December 7th (TradersHuddle.com) - Shares of SLM Corporation (NYSE:SLM) ended the trading session higher by $0.45 or 3.54% from its previous close. SLM'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.

SLM Corporation (NYSE:SLM), commonly known as Sallie Mae, provides education funding, originating and servicing of U.S. government guaranteed and private student loans. The Company, through its subsidiaries, also provides debt management services to colleges, universities and loan guarantors.

SLM's recent stock range has been formed by a trough where calculated support was defined at $11.97 and by a peak that established the resistance level at $13.06, which could be used by traders planning their trades.

Traders wanting to establish a position in SLM 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: