Baker Hughes Bullish Engulfing Formed

Published on Tuesday, 07 February 2012 04:24 Written by TradersHuddle Wire

New York, February 7th (TradersHuddle.com) - Shares of Baker Hughes Incorporated (NYSE:BHI) ended the trading session higher by $1.09 or 2.14% from its previous close. Baker Hughes' 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.

Baker Hughes Incorporated (NYSE:BHI) supply wellbore related products, and technology services and systems for drilling, formation evaluation, completion and production, and reservoir technology and consulting to the oil and natural gas industry worldwide. From the reservoir to the refinery the company creates value with high-performance products and services to analyze, drill, evaluate, complete and produce oil and gas reserves and then transport and refine the hydrocarbons.

Baker Hughes' recent stock range has been formed by a trough where calculated support was defined at $45.51 and by a peak that established the resistance level at $50.30, which could be used by traders planning their trades.

Traders wanting to establish a position in Baker Hughes 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: