Are the Bears Taking Control over Eaton?

Published on Wednesday, 01 February 2012 05:00 Written by Christopher Lynn

New York, February 1st (TradersHuddle.com) - Shares of Eaton Corporation (NYSE:ETN) ended the trading session lower by $0.67 or -1.34% from its previous close. Eaton's price action formed what is considered to be a bearish engulfing candlestick chart pattern.

Eaton Corporation (NYSE:ETN) is a diversified power management company and a global technology leader in electrical components and systems for power quality, distribution and control; hydraulics components, systems and services for industrial and mobile equipment; aerospace fuel, hydraulics and pneumatic systems for commercial and military use; and truck and automotive drivetrain and powertrain systems for performance, fuel economy and safety.

Eaton's current stock range is defined by calculated support defined at $47.53 and by the resistance level at $49.99, which should be used by traders planning their trades.

Traders wanting to establish a position in Eaton stock need to pay close attention at the bearish engulfing pattern, since it could mark a trend reversal to current Eaton shares price action. The Bearish engulfing pattern is a leading warning sign, therefore traders should closely monitor price action for indications of a trend reversal. Below an Engulfing Bearish Candle Illustration: