Jack in the Box Bullish Engulfing Formed
Published on Monday, 20 August 2012 04:51 Written by TradersHuddle Wire
New York, August 20th (TradersHuddle.com) - Shares of Jack in the Box Inc. (NASDAQ:JACK) ended the trading session higher by $0.33 or 1.27% from its previous close. Jack in the Box'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.
Jack in the Box Inc. (NASDAQ:JACK) operates and franchises Jack In the Box fast-food restaurants. Its drive-thru restaurants offer hamburgers, specialty sandwiches, salads, finger foods, and side items.
Jack in the Box's recent stock range was formed by a trough where calculated support was defined at $25.41 and by a peak that established the resistance level at $27.55. This range could be used by traders managing their positions.
Traders wanting to establish a position in Jack in the Box 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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