Intrepid Potash Bullish Engulfing Formed

Published on Friday, 10 August 2012 04:06 Written by TradersHuddle Wire

New York, August 10th (TradersHuddle.com) - Shares of Intrepid Potash, Inc. (NYSE:IPI) ended the trading session higher by $0.43 or 1.98% from its previous close. Intrepid Potash'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.

Intrepid Potash, Inc. (NYSE:IPI) mines and markets potash for use as a fertilizer. It also offers by-products, including salt, magnesium chloride, and metal recovery salts. Intrepid serves agricultural, industrial, and feed markets. The company is based in Denver, Colorado.

Intrepid Potash's recent stock range was formed by a trough where calculated support was defined at $21.54 and by a peak that established the resistance level at $23.70. This range could be used by traders managing their positions.

Traders wanting to establish a position in Intrepid Potash 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: