Shares of BlackRock Bottoming out?

Published on Tuesday, 17 January 2012 04:21 Written by Christopher Lynn

New York, January 17th (TradersHuddle.com) - Shares of BlackRock, Inc. (NYSE:BLK) ended the trading session lower by $0.49 or -0.26% from its previous close. BlackRock'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.

BlackRock, Inc. (NYSE:BLK) provides diversified investment management services to institutional clients and to retail investors through various investment products. The Company offers the BlackRock Funds and Blackrock Liquidity Funds, and also provides risk management services to fixed income institutional investors.

BlackRock's stock has been trading in a well defined range with support at $175.18 and resistance at $187.17, this range is also being used by traders to plan their positions.

Traders wanting to establish a position in BlackRock 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 BlackRock, 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: