Legg Mason Bullish Engulfing Formed

Published on Monday, 21 May 2012 22:09 Written by TradersHuddle Wire

New York, May 21st (TradersHuddle.com) - Shares of Legg Mason, Inc. (NYSE:LM) ended the trading session higher by $0.78 or 3.24% from its previous close. Legg Mason'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.

Legg Mason, Inc. (NYSE:LM) is a global asset management company. The Company, through its subsidiaries, provides investment management and related services to institutional and individual clients, company-sponsored mutual funds and other pooled investment vehicles.

Legg Mason's recent stock range was formed by a trough where calculated support was defined at $22.36 and by a peak that established the resistance level at $25.05. This range could be used by traders managing their positions.

Traders wanting to establish a position in Legg Mason 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: