Macy's Bullish Engulfing Formed

Published on Tuesday, 19 June 2012 04:51 Written by TradersHuddle Wire

New York, June 19th (TradersHuddle.com) - Shares of Macy's, Inc. (NYSE:M) ended the trading session higher by $0.55 or 1.53% from its previous close. Macy's, Inc. 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.

Macy's, Inc. (NYSE:M) operates department stores in the United States. The New York, NY based company also operates direct mail catalog and electronic commerce subsidiaries. Macy's retail stores sell a wide range of merchandise, including men's, women's and children's apparel and accessories, cosmetics, home furnishings and other consumer goods.

Macy's, Inc. recent stock range was formed by a trough where calculated support was defined at $34.83 and by a peak that established the resistance level at $37.97. This range could be used by traders managing their positions.

Traders wanting to establish a position in Macy's 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: