Brown-Forman - Shares Seeking Direction
Published on Wednesday, 30 May 2012 04:03 Written by TradersHuddle Wire
New York, May 30th (TradersHuddle.com) - Shares of Brown-Forman Corporation (NYSE:BF.B) closed the trading day higher by $0.37 or 0.42% from its previous close. Brown-Forman's price action formed what is considered to be a doji close, where the open and close prices are very close to each other, mainly signaling an indecision between buyers and sellers.
Brown-Forman Corporation (NYSE:BF.B) manufactures, bottles, imports, exports, and markets alcoholic beverage. It offers consumer beverage alcohol products, including Tennessee, Canadian, and Kentucky whiskeys; Kentucky bourbon; tequila; vodka; liqueurs; California sparkling wine; table wine; and ready-to-drink products. The company provides its products under mnay brands, including Jack Daniel's Tennessee Whiskey, Herradura Tequila, Finlandia Vodka, Sonoma-Cutrer Wines, el Jimador Tequila, and Woodford Reserve Bourbon. and Fetzer Wines band names. Brown-Forman sell its products worldwide and is based in Louisville, Kentucky.
Brown-Forman's trading range is defined by a trough, which marked calculated support at $76.95 and by a peak that set the resistance point at $88.03. These levels are closely watched by traders managing their positions.
Traders wanting to establish a position in Brown-Forman or traders that are already holding the stock can use the doji close to their advantage, since the pattern present a short-term pause in the stock's price action. This pause results in an entry point for traders depending of which way the stock resolves this short-term indecision.
The Doji is an important candlestick pattern that provides information on their own and as components in a number of important patterns. Doji form when a security's open and close are virtually equal. The length of the upper and lower shadows can vary and the resulting candlestick looks like a cross, inverted cross or plus sign. Alone, doji are neutral patterns.
Any bullish or bearish bias is based on preceding price action and future confirmation. In the case of Brown-Forman, given that the stock finished the session higher, bulls should monitor their positions for confirmation that the stock will continue higher by taking its intraday high. Below a Doji illustration:
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