Bulls taking Control - Winnebago?

Published on Friday, 06 January 2012 04:27 Written by Christopher Lynn

New York, January 6th (TradersHuddle.com) - Shares of Winnebago Industries, Inc. (NYSE:WGO) ended the trading session higher by $0.06 or 0.8% from its previous close. Winnebago'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.

Winnebago Industries, Inc. (NYSE:WGO), is a leading U.S. manufacturer of recreation vehicles, which are used primarily in leisure travel and outdoor recreation activities. The Company builds quality motor homes, travel trailers and fifth wheel products under the Winnebago, Itasca, ERA and SunnyBrook brand names. Winnebago Industries has received the Quality Circle Award from the Recreation Vehicle Dealers Association every year since the award's inception in 1996.

Winnebago's recent stock range has been formed by a trough where calculated support was defined at $7.38 and by a peak that established the resistance level at $7.91, which could be used by traders planning their trades.

Traders wanting to establish a position in Winnebago 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: