Forest Laboratories Formed a Tweezer Bottom

Published on Friday, 06 January 2012 04:36 Written by Danny Miller

New York, January 6th (TradersHuddle.com) - Shares of Forest Laboratories, Inc. (NYSE:FRX) ended the trading session higher by $0.1 or 0.33% from its previous close. Forest Laboratories' price action developed what can be considered a reversal pattern in the form of a tweezer bottom, which is a candlestick pattern that is usually formed at the end of a downtrend. The tweezer bottom is considered a reversal pattern, so traders will need to monitor the the price action for confirmation.

Forest Laboratories, Inc. (NYSE:FRX) develops, manufactures, and sells branded and generic forms of ethical drug products. The Company also manufactures non-prescription pharmaceutical products sold over-the-counter, which are used for the treatment of a wide range of illnesses.

Traders looking for an entry in Forest Laboratories can use the tweezers as a good reference point to establish the long position, as the pattern provides defined risk by giving a good reference point for support.

Traders are always looking for tweezer bottoms as they give an entry with a small risk defined, they are a leading indicator that provides an alert for a trend reversal or stabilization. The tweezers imply that bears or sellers were not able to push the stock lower, therefore providing the opportunity to look for a bounce. Below an example of Tweezer Bottom reversal patterns: