Bulls taking Control of Valspar?
Published on Thursday, 03 May 2012 04:09 Written by TradersHuddle Wire
New York, May 3rd (TradersHuddle.com) - Shares of Valspar Corporation (NYSE:VAL) ended the trading session higher by $0.45 or 0.88% from its previous close. Valspar's 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.
Valspar Corporation (NYSE:VAL) is a manufacturer and distributor of coatings, coating intermediates, and specialty chemical products. The Company supply customers with the ideal coatings solutions for their needs, including industrial coatings for wood, metal and plastic for OEMs, coatings and inks for rigid packaging, paints, varnishes and stains, primarily for the do-it-yourself market, coatings for refinishing vehicles, high performance floor coatings, and resins and colorants for internal use and for other paint and coatings products.
Valspar's recent stock range was formed by a trough where calculated support was defined at $48.21 and by a peak that established the resistance level at $52.12. This range could be used by traders managing their positions.
Traders wanting to establish a position in Valspar 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:
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