New York, June 16th (TradersHuddle.com) - Shares of National-Oilwell Varco Inc. (NYSE:NOV) ended the trading session higher by $1.04 or 1.56% from its previous close. National-Oilwell Varco's price action in the session formed what is considered to be a Hammer, where bears drove prices lower intraday. However, the strong finish indicates that bulls regained control, forming a trend reversal.
National-Oilwell Varco Inc. (NYSE:NOV) designs, manufactures, and sells machinery, equipment, and downhole products used in oil and gas drilling and production. The Company also provides oilfield inspection and other services, and supply chain integration services to the upstream oil and gas industry.
National-Oilwell Varco's stock has been trading in a well defined range with calculated support at $63.33 and resistance at $70.63. This range can be used by traders to plan their next moves.
Traders wanting to establish a position in National-Oilwell Varco or traders that are already holding the stock can use the hammer formation to their advantage, since the pattern signal a potential bullish trend reversal.
The Hammer is an important candlestick pattern, as it can mark bottoms and support levels. Further buying pressure, and preferably on expanding volume, is needed before acting, as heavy volume will serve to confirm the validity of the reversal.
In the case of National-Oilwell Varco, traders who want to add to their positions or start a new position, need to watch for confirmation of the reversal. Below a Hammer illustration: