Bulls and Bears on the Trenches - Viacom

Published on Thursday, 15 December 2011 04:36 Written by TradersHuddle Staff

New York, December 15th (TradersHuddle.com) - Shares of Viacom Inc. (NYSE:VIA.B) closed the trading day flat by $0 or 0% from its previous close. Viacom's shares price action formed what is considered to be a doji close, where the open and close prices are very close to each other, mainly signaling an indecision between buyers and sellers.

Viacom Inc. (NYSE:VIA.B) operates as an entertainment content company It operates in two segments, Media Networks and Filmed Entertainment. The Media Networks segment provides entertainment content to advertisers, content distributors, and retailers across various distribution platforms, the company serves through networks like MTV, Nickelodeon, and Comedy Central. The Filmed Entertainment segment produces, finances, and distributes motion pictures under the Paramount Pictures, MTV, and Nickelodeon movie brands.

Viacom's current stock range is defined by a trough, which marks calculated support at $48.60 and by a peak that marked the resistance point at $51.50. These levels are closely watched by traders managing their positions.

Traders wanting to establish a position in Viacom or traders that are already holding the stock can use the doji close to their advantage, since the pattern present a short term pause in the stock's price action. This pause results in an entry point for traders depending of which way the stock resolves this short term indecision.

Doji are important candlesticks that provide information on their own and as components in a number of important patterns. Doji form when a security's open and close are virtually equal. The length of the upper and lower shadows can vary and the resulting candlestick looks like a cross, inverted cross or plus sign. Alone, doji are neutral patterns.

Any bullish or bearish bias is based on preceding price action and future confirmation. In the case of Viacom, given that the stock finished the session flat, traders will be looking at both sides of the doji, a bullish bias will materialize if the stock manages to break today's intraday high, on the flip side, a bearish bias will haunt the stock if it breaks today's intraday low. Below a Doji illustration: