GameStop Formed a Tweezer Bottom

Published on Thursday, 19 January 2012 04:03 Written by TradersHuddle Staff

New York, January 19th (TradersHuddle.com) - Shares of GameStop Corporation (NYSE:GME) ended the trading session higher by $0.79 or 3.4% from its previous close. GameStop's 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.

GameStop Corporation (NYSE:GME) operates specialty electronic game and PC entertainment software stores throughout the United States, Australia, Canada and Europe. The Company stores sell new and used video game hardware, video game software and accessories

Traders looking for an entry in GameStop 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: