Shares of American Water Works Bottoming out?

awk New York, January 19th (TradersHuddle.com) – Shares of American Water Works Co., Inc. (NYSE:AWK) ended the trading session higher by $0.07 or 0.22% from its previous close. American Water Works’ 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.

American Water Works Co., Inc. (NYSE:AWK) provides drinking water, wastewater and other water-related services in multiple states and Ontario, Canada. The Company’s primary business involves the ownership of regulated water and wastewater utilities that provide water and wastewater services to residential, commercial and industrial customers.

American Water Works’ stock has been trading in a well defined range with support at $29.63 and resistance at $32.78, this range is also being used by traders to plan their positions.

Traders wanting to establish a position in American Water Works 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 American Water Works, 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:

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