Bulls in Charge of Sears Holdings
Published on Tuesday, 22 May 2012 07:42 Written by TradersHuddle Wire
New York, May 22nd (TradersHuddle.com) - Shares of Sears Holdings Corporation (NASDAQ:SHLD) ended the trading session higher by $2.67 or 5.11% from its previous close. Sears' 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.
Sears Holdings Corporation (NASDAQ:SHLD) is a broadline retailer with full-line and specialty retail stores in the United States and Canada. The Company retails home appliances, as well as tools, lawn and garden products, home electronics, and general merchandise through its Sears and Kmart chains.
Sears' recent stock range was formed by a trough where calculated support was defined at $50.52 and by a peak that established the resistance level at $58.14. This range could be used by traders managing their positions.
Traders wanting to establish a position in Sears Holdings 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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