Biogen Idec Upside Looming?

Published on Tuesday, 31 January 2012 21:24 Written by Danny Miller

New York, January 31st (TradersHuddle.com) - Shares of Biogen Idec Inc. (NASDAQ:BIIB) ended the trading session higher by $1.37 or 1.18% from its previous close. Biogen's price action formed what is considered to be a bullish engulfing candle that could very well signal continuation of trend or reversal on ongoing weakness.

Biogen Idec Inc. (NASDAQ:BIIB) develops, manufactures, and commercializes therapies, focusing on neurology, oncology, and immunology. The products from the biotechnology company addresses diseases such as multiple sclerosis, non-Hodgkin's lymphoma, rheumatoid arthritis, crohn's disease, and psoriasis. The company was founded in 1985 and is based in

Biogen's recent stock range has been formed by a trough where calculated support was defined at $109.52 and by a peak that established the resistance level at $119.56, which could be used by traders planning their trades.

Traders wanting to establish a position in Biogen Idec or traders that are already holding the stock can use the bullish engulfing pattern to their advantage. The pattern provides a defined risk as it shows where the bears were able to push the stock down, before the bulls stepped in.

The bullish engulfing pattern is a leading indicator that provides an alert to the bulls that the trend will continue or that there is an immediate reversal to the short term weakness seen on the stock. Below an Engulfing Bullish Candle Illustration: