Logitech - Traders Looking for a Bottom

Published on Wednesday, 28 December 2011 04:45 Written by TradersHuddle Staff

New York, December 28th (TradersHuddle.com) - Shares of Logitech International S.A. (NASDAQ:LOGI) ended the trading session higher by $0.01 or 0.13% from its previous close. Logitech's price action in today's session formed what is considered to be a Hammer, where bears drove prices lower intraday. However, the strong finish indicates that bulls regained control forming a trend reversal.

Logitech International S.A. (NASDAQ:LOGI) manufactures personal computer peripheral devices. The Company produces computer mice which help the user move the cursor around the computer, trackballs, game controllers, keyboards, PC video cameras, and multimedia speakers.

Logitech's stock has been trading in a well defined range with support at $7.17 and resistance at $7.81, this range is also being used by traders to plan their positions.

Traders wanting to establish a position in Logitech or traders that are already holding the stock can use the hammer formation to their advantage, since the pattern signal a potential bullish trend reversal.

Hammers are important candlesticks as they mark bottoms and support levels. Further buying pressure, and preferably on expanding volume, is needed before acting, as heavy volume will serve to confirm the validity of the reversal.

In the case of Logitech, traders who want to add to their positions or start a new position, need to watch for confirmation of the reversal. Below a Hammer illustration: