Bulls in Charge of Omnicare

Published on Monday, 14 May 2012 04:57 Written by TradersHuddle Wire

New York, May 14th (TradersHuddle.com) - Shares of Omnicare, Inc. (NYSE:OCR) ended the trading session higher by $0.55 or 1.6% from its previous close. Omnicare'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.

Omnicare, Inc. (NYSE:OCR), based in Covington, Kentucky, is a leading provider of pharmaceutical care for the elderly. Omnicare serves residents in long-term care facilities, chronic care and other settings in 47 states, the District of Columbia and Canada. Omnicare is the largest U.S. provider of professional pharmacy, related consulting and data management services for skilled nursing, assisted living and other institutional healthcare providers as well as for hospice patients in homecare and other settings. Its pharmacy services also include distribution and patient assistance services for specialty pharmaceuticals. Omnicare also offers clinical research services for the pharmaceutical and biotechnology industries in 31 countries worldwide.

Omnicare's recent stock range was formed by a trough where calculated support was defined at $33.66 and by a peak that established the resistance level at $36.48. This range could be used by traders managing their positions.

Traders wanting to establish a position in Omnicare 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: