Eaton Vance: Waiting for Direction

Published on Tuesday, 24 April 2012 04:54 Written by TradersHuddle Wire

New York, April 24th (TradersHuddle.com) - Shares of Eaton Vance Corp. (NYSE:EV) closed the trading day lower by $0.36 or -1.37% from its previous close. Eaton Vance's price action formed what is considered to be a doji close, where the open and close prices are very close to each other, mainly signaling an indecision between buyers and sellers.

Eaton Vance Corp. (NYSE:EV) is a comprehensive wealth manager engaged in managing investment funds and providing investment management and counseling services to high-net-worth individuals and institutions. The Company focuses to develop and sustain management expertise across a range of investment disciplines and to offer investment products and services through multiple distribution channels. Its product line offers fund shareholders, retail managed account investors, institutional investors and high-net-worth clients a range of products and services designed and managed to generate attractive long term risk-adjusted returns.

Eaton Vance's trading range is defined by a trough, which marked calculated support at $26.26 and by a peak that set the resistance point at $29.64. These levels are closely watched by traders managing their positions.

Traders wanting to establish a position in Eaton Vance or traders that are already holding the stock can use the doji close to their advantage, since the pattern present a short-term pause in the stock's price action. This pause results in an entry point for traders depending of which way the stock resolves this short-term indecision.

The Doji is an important candlestick pattern that provides information on their own and as components in a number of important patterns. Doji form when a security's open and close are virtually equal. The length of the upper and lower shadows can vary and the resulting candlestick looks like a cross, inverted cross or plus sign. Alone, doji are neutral patterns.

Any bullish or bearish bias is based on preceding price action and future confirmation. In the case of Eaton Vance, given that the stock finished the session lower, bears should monitor the stock, as it could reverse if it manages to trade above its intraday high. Below a Doji illustration: