General Cable - Bears taking control?

Published on Friday, 20 July 2012 04:39 Written by TradersHuddle Wire

New York, July 20th (TradersHuddle.com) - General Cable Corporation (NYSE:BGC) closed the trading session lower by $0.44 or -1.59% from its previous close. The latest price action developed a short term reversal pattern in the form of a tweezer top, which is a candlestick pattern that is usually formed at the end of an uptrend. Given that the tweezer top is considered a reversal pattern, traders with long positions need to monitor the price action for confirmation of weakness, and plan the position accordingly.

General Cable Corporation (NYSE:BGC) develops, manufactures, markets, and distributes copper, aluminum, and fiber optic wire and cable products for the communications, electrical, and energy markets.

General Cable's stock has been in a defined range with calculated support at $ and resistance at $. Given the possibility of short-term weakness in the stock's price, this range could be used by traders managing their positions.

Tweezer tops are exactly the opposite of tweezer bottoms, as they define a resistance point for General Cable that needs to be digested prior for the stock to move to a higher level.

Tweezer tops can be formed at the end of an uptrend, at a clear horizontal resistance point, or within a downtrend when price action is dealing with the declining resistance trend. Like any other candlestick pattern, it needs confirmation by trading below the previous day low. Below there is an example of the Tweezer Top reversal pattern: