Bulls taking Control of Abbott Labs?

Published on Monday, 23 April 2012 04:42 Written by TradersHuddle Wire

New York, April 23rd (TradersHuddle.com) - Shares of Abbott Laboratories (NYSE:ABT) ended the trading session higher by $0.37 or 0.62% from its previous close. Abbott Labs' price action formed what is considered to be a bullish engulfing candle that could very well signal a continuation of trend or reversal of the ongoing weakness.

Abbott Laboratories (NYSE:ABT) develops, manufactures, and sells a broad and diversified line of health care products and services. The Company's products include pharmaceuticals, nutritional, diagnostics, and vascular products. Abbott markets its products worldwide through affiliates and distributors. The company was founded in 1888 and is based in Abbott Park, Illinois.

Abbott Labs' recent stock range was formed by a trough where calculated support was defined at $59.38 and by a peak that established the resistance level at $61.49. This range could be used by traders managing their positions.

Traders wanting to establish a position in Abbott Labs 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 step in with a bid.

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: