Bulls taking over on Chicago Bridge & Iron?

Published on Friday, 15 June 2012 05:06 Written by TradersHuddle Wire

New York, June 15th (TradersHuddle.com) - Shares of Chicago Bridge & Iron Company N.V. (NYSE:CBI) ended the trading session lower by $0.09 or -0.26% from its previous close. Chicago Bridge & Iron's price action developed what can be considered a reversal pattern in the form of a tweezer bottom, which is a candlestick pattern that is usually formed at the end of a downtrend. The tweezer bottom is considered a reversal pattern, so traders will need to monitor the price action for confirmation.

Chicago Bridge & Iron Company N.V. (NYSE:CBI) designs, engineers and constructs some of the largest energy infrastructure projects in the world. The company also fabricates, erects, and repairs steel plate structures and their associated systems. It builds and repairs bulk liquid terminals, storage tanks, process vessels, and low temperature and cryogenic storage facilities.

Traders looking for an entry in Chicago Bridge & Iron can use the tweezers as a good reference point to establish the long position, as the pattern provides defined risk by giving a good reference point for support.

Traders look for tweezer bottoms, as they provide an entry with a small defined risk. They are a leading indicator that provide an alert for a trend reversal or stabilization. The tweezers imply that bears or sellers were not able to push the stock lower, therefore providing the opportunity to look for a bounce. Below an example of a Tweezer Bottom reversal pattern: