Yahoo! Formed a Tweezer Top

Published on Thursday, 02 February 2012 17:15 Written by Danny Miller

New York, February 2nd (TradersHuddle.com) - Yahoo! Inc. (NASDAQ:YHOO) shares closed the session lower by $0.01 or -0.06% from its previous close. Yahoo'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.

Yahoo! Inc. (NASDAQ:YHOO) is a global Internet media company that offers Internet services to users, advertisers, publishers, and developers worldwide. The company owns and operates online properties and services, and provides its advertising offerings and access to Internet users through its distribution network of third-party entities, as well as offers marketing services to advertisers and publishers. Yahoo owns the second largest internet search engine and provides email services to its users.

Yahoo's stock has been a defined range with support at $15.35 and resistance at $16.15, 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 Yahoo! 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: