JA Solar - Time for the Bulls?

Published on Sunday, 22 January 2012 19:27 Written by Christopher Lynn

New York, January 22nd (TradersHuddle.com) - Shares of JA Solar Holdings Co., Ltd. (NASDAQ:JASO) ended the trading session lower by $0.04 or -2.22% from its previous close. JA Solar'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.

JA Solar Holdings Co., Ltd. (NASDAQ:JASO), through its subsidiaries, engages in the design, manufacture, and marketing of high-performance solar cells. The company sells its products to solar module manufacturers who assemble and integrate solar cells into modules and systems that convert sunlight into electricity for power generation. JA Solar is based in Shanghai, China.

Traders looking for an entry in JA Solar 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: