Coach: Time for the Bulls?

Published on Friday, 22 June 2012 04:21 Written by TradersHuddle Wire

New York, June 22nd (TradersHuddle.com) - Shares of Coach, Inc. (NYSE:COH) ended the trading session lower by $1.85 or -3% from its previous close. Coach'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.

Coach, Inc. (NYSE:COH) designs, makes, and markets luxury lifestyle handbags and accessories. Its products include handbags, business cases, men's and women's accessories, luggage and travel accessories. Coach, together with a licensing partner, offers watches, footwear, furniture, and eyewear.

Traders looking for an entry in Coach 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: