Bulls in Charge of Gildan

Published on Thursday, 03 May 2012 04:24 Written by TradersHuddle Wire

New York, May 3rd (TradersHuddle.com) - Shares of Gildan Activewear Inc. (NYSE:GIL) ended the trading session higher by $0.97 or 3.48% from its previous close. Gildan'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.

Gildan Activewear Inc. (NYSE:GIL) is a vertically-integrated marketer and manufacturer of quality branded basic apparel. Its main focus is activewear, selling it principally in the wholesale imprinted activewear segment of the North American apparel market. Gildan sells cotton T-shirts, placket collar golf shirts, tank tops, and sweatshirts. The Company is also a leading supplier of private label and Gildan branded socks primarily sold to mass-market retailers.

Gildan's recent stock range was formed by a trough where calculated support was defined at $26.51 and by a peak that established the resistance level at $28.09. This range could be used by traders managing their positions.

Traders wanting to establish a position in Gildan 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: