Bulls and Bears on the Trenches of Avery

Published on Friday, 03 August 2012 04:30 Written by TradersHuddle Wire

New York, August 3rd (TradersHuddle.com) - Shares of Avery Dennison Corporation (NYSE:AVY) closed the trading day lower by $0.21 or -0.68% from its previous close. Avery Dennison's price action formed what is considered to be a doji close, where the open and close prices are very close to each other, mainly signaling an indecision between buyers and sellers.

Avery Dennison Corporation (NYSE:AVY) develops, manufactures, and markets pressure-sensitive materials, office products and a variety of tickets, tags, and labels. The Company also manufacture a variety of office products and other converted products, as well as binders, organizing systems, markers, fasteners, and business forms, and other products.

Avery Dennison's trading range is defined by a trough, which marked calculated support at $27.79 and by a peak that set the resistance point at $31.37. These levels are closely watched by traders managing their positions.

Traders wanting to establish a position in Avery or traders that are already holding the stock can use the doji close to their advantage, since the pattern present a short-term pause in the stock's price action. This pause results in an entry point for traders depending of which way the stock resolves this short-term indecision.

The Doji is an important candlestick pattern that provides information on their own and as components in a number of important patterns. Doji form when a security's open and close are virtually equal. The length of the upper and lower shadows can vary and the resulting candlestick looks like a cross, inverted cross or plus sign. Alone, doji are neutral patterns.

Any bullish or bearish bias is based on preceding price action and future confirmation. In the case of Avery , given that the stock finished the session lower, bears should monitor the stock, as it could reverse if it manages to trade above its intraday high. Below a Doji illustration: