TE Connectivity Bullish Engulfing Formed

Published on Tuesday, 21 August 2012 04:27 Written by TradersHuddle Wire

New York, August 21st (TradersHuddle.com) - Shares of TE Connectivity Ltd. (NYSE:TEL) ended the trading session lower by $0.15 or -0.42% from its previous close. TE Connectivity'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.

TE Connectivity Ltd. (NYSE:TEL), formerly Tyco Electronics Ltd., manufactures engineered electronic components, network solutions, undersea telecommunication systems, and wireless systems. The Company provides products for customers in industries ranging from automotive, appliance, and aerospace and defense to telecommunications, computers, and consumer electronics.

TE Connectivity's recent stock range was formed by a trough where calculated support was defined at $31.83 and by a peak that established the resistance level at $35.77. This range could be used by traders managing their positions.

Traders wanting to establish a position in TE Connectivity 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: