LDK Solar Bullish Signs

Published on Monday, 19 December 2011 04:36 Written by TradersHuddle Staff

New York, December 19th (TradersHuddle.com) - Shares of LDK Solar Co. Ltd. (NYSE:LDK) ended the trading session higher by $0.18 or 4.25% from its previous close. LDK Solar'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.

LDK Solar Co. Ltd. (NYSE:LDK) is a manufacturer of multicrystalline solar wafers, which are the principal raw material used to produce solar cells. LDK sells multicrystalline wafers globally to manufacturers of photovoltaic products, including solar cells and solar modules. In addition, the company provides wafering services to monocrystalline and multicrystalline solar cell and module manufacturers.

LDK Solar's recent stock range has been formed by a trough where calculated support was defined at $4.13 and by a peak that established the resistance level at $4.68, which could be used by traders planning their trades.

Traders wanting to establish a position in LDK Solar 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: