ConAgra: Ready for some Upside?

Published on Thursday, 13 September 2012 04:57 Written by TradersHuddle Wire

New York, September 13th (TradersHuddle.com) - Shares of ConAgra Foods, Inc. (NYSE:CAG) ended the trading session lower by $0.13 or -0.5% from its previous close. ConAgra's price action developed what can be considered a reversal pattern in the form of a tweezer bottom, which is a candlestick pattern that is usually formed at the end of a downtrend. The tweezer bottom is considered a reversal pattern, so traders will need to monitor the price action for confirmation.

ConAgra Foods, Inc. (NYSE:CAG) manufactures and markets packaged foods for retail consumers, restaurants and institutions. The Company offers a wide range of food products under several brand names including Chef Boyardee, Egg Beaters, Healthy Choice, Hebrew National, PAM, Peter Pan, and Slim Jim.

Traders looking for an entry in ConAgra can use the tweezers as a good reference point to establish the long position, as the pattern provides defined risk by giving a good reference point for support.

Traders look for tweezer bottoms, as they provide an entry with a small defined risk. They are a leading indicator that provide an alert for a trend reversal or stabilization. The tweezers imply that bears or sellers were not able to push the stock lower, therefore providing the opportunity to look for a bounce. Below an example of a Tweezer Bottom reversal pattern: