Bulls in Charge of NVIDIA

Published on Wednesday, 12 September 2012 05:03 Written by TradersHuddle Wire

New York, September 12th (TradersHuddle.com) - Shares of NVIDIA Corporation (NASDAQ:NVDA) ended the trading session higher by $0.16 or 1.2% from its previous close. NVIDIA'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.

NVIDIA Corporation (NASDAQ:NVDA) designs, develops, and markets three dimensional graphics processors and related software. Its products provide interactive 3D graphics to the mainstream personal computer market.

NVIDIA's recent stock range was formed by a trough where calculated support was defined at $12.95 and by a peak that established the resistance level at $15.22. This range could be used by traders managing their positions.

Traders wanting to establish a position in NVIDIA 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: