Quest Diagnostics Bullish Signs

Published on Tuesday, 22 May 2012 07:51 Written by TradersHuddle Wire

New York, May 22nd (TradersHuddle.com) - Shares of Quest Diagnostics Incorporated (NYSE:DGX) ended the trading session higher by $0.84 or 1.49% from its previous close. Quest Diagnostics' 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.

Quest Diagnostics Incorporated (NYSE:DGX) provides diagnostic testing, information, and services. The Company operates a national network of full-service laboratories, rapid response laboratories, and patient service centers. Quest Diagnostics provides esoteric testing, routine medical testing, and drugs abuse testing.

Quest Diagnostics' recent stock range was formed by a trough where calculated support was defined at $57.26 and by a peak that established the resistance level at $61.00. This range could be used by traders managing their positions.

Traders wanting to establish a position in Quest Diagnostics 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: