Under Armour Short term Bullish Reversal

Published on Thursday, 23 August 2012 04:33 Written by TradersHuddle Wire

New York, August 23rd (TradersHuddle.com) - Shares of Under Armour, Inc. (NYSE:UA) ended the trading session higher by $0.23 or 0.41% from its previous close. Under Armour'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.

Under Armour, Inc. (NYSE:UA) develops, markets, and distributes branded performance products for men, women, and youth. The company offers products made from moisture-wicking synthetic fabrics designed to regulate body temperature and enhance performance regardless of weather conditions.

Under Armour's recent stock range was formed by a trough where calculated support was defined at $53.02 and by a peak that established the resistance level at $58.48. This range could be used by traders managing their positions.

Traders wanting to establish a position in Under Armour 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: