Silver Wheaton Bullish Engulfing Formed
Published on Tuesday, 31 July 2012 05:03 Written by TradersHuddle Wire
New York, July 31st (TradersHuddle.com) - Shares of Silver Wheaton Corportation (NYSE:SLW) ended the trading session higher by $0.64 or 2.33% from its previous close. Silver Wheaton's 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.
Silver Wheaton Corportation (NYSE:SLW) is the largest metals streaming company in the world, and the only company that derives more than 95% of its revenue from the sale of silver. The company purchases and sells by-product silver from operating mines. The Company has long term contracts to purchase all or a portion of the silver production from mines in Mexico, Chile, Argentina, Peru, Sweden, Greece, Portugal, Canada and the United States.
Silver Wheaton's recent stock range was formed by a trough where calculated support was defined at $25.11 and by a peak that established the resistance level at $26.64. This range could be used by traders managing their positions.
Traders wanting to establish a position in Silver Wheaton 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:
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