GameStop Stalling at Resistance

Published on Thursday, 26 January 2012 04:21 Written by Christian Paolinetti

New York, January 26th (TradersHuddle.com) - GameStop Corporation (NYSE:GME) shares closed the session higher by $0.25 or 1.01% from its previous close. GameStop's latest price action developed a short term reversal pattern in the form of a tweezer top, which is a candlestick pattern that is usually formed at the end of a uptrend. Given that the tweezer top is considered a reversal pattern, traders with long positions need to monitor stock price action for confirmation of weakness and plan position accordingly.

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

GameStop's stock has been a defined range with support at $23.10 and resistance at $25.00, which can be used by traders managing their trades, given the possibility of short term weakness in the stock.

Tweezer tops are exactly the opposite of tweezer bottoms, as they define a resistance point for GameStop that needs to be digested prior to the stock price to move higher.

Tweezer tops can be formed at the end of an uptrend, at a clear horizontal resistance point, or within a downtrend when price action is dealing with the declining resistance trend. Like any other candlestick pattern it needs confirmation by trading below the previous day low. Below an example of Tweezer Top reversal patterns: