Bottom Fishing on ConAgra
Published on Friday, 03 August 2012 04:42 Written by TradersHuddle Wire
New York, August 3rd (TradersHuddle.com) - Shares of ConAgra Foods, Inc. (NYSE:CAG) ended the trading session lower by $0.13 or -0.53% from its previous close. ConAgra's price action in the session formed what is considered to be a Hammer, where bears drove prices lower intraday. However, the strong finish indicates that bulls regained control, forming a trend reversal.
ConAgra Foods, Inc. (NYSE:CAG) manufactures and markets packaged foods for retail consumers, restaurants and institutions. The Company offers a wide range of food products under several brand names including Chef Boyardee, Egg Beaters, Healthy Choice, Hebrew National, PAM, Peter Pan, and Slim Jim.
ConAgra's stock has been trading in a well defined range with calculated support at $23.64 and resistance at $25.93. This range can be used by traders to plan their next moves.
Traders wanting to establish a position in ConAgra or traders that are already holding the stock can use the hammer formation to their advantage, since the pattern signal a potential bullish trend reversal.
The Hammer is an important candlestick pattern, as it can mark bottoms and support levels. Further buying pressure, and preferably on expanding volume, is needed before acting, as heavy volume will serve to confirm the validity of the reversal.
In the case of ConAgra, traders who want to add to their positions or start a new position, need to watch for confirmation of the reversal. Below a Hammer illustration: