Neutral Short Term Pattern on Briggs & Stratton

Published on Tuesday, 18 September 2012 04:54 Written by TradersHuddle Wire

New York, September 18th (TradersHuddle.com) - Shares of Briggs & Stratton Corporation (NYSE:BGG) closed the trading day lower by $0.09 or -0.46% from its previous close. Briggs & Stratton's price action formed what is considered to be a doji close, where the open and close prices are very close to each other, mainly signaling an indecision between buyers and sellers.

Briggs & Stratton Corporation (NYSE:BGG) is the largest producer in the world of air-cooled gasoline engines for outdoor power equipment. The company designs, manufactures, markets, small engines, lawn mower engines, portable generators, and home generators for original equipment manufacturers (OEMs) worldwide.

Briggs & Stratton's trading range is defined by a trough, which marked calculated support at $16.91 and by a peak that set the resistance point at $18.13. These levels are closely watched by traders managing their positions.

Traders wanting to establish a position in Briggs & Stratton or traders that are already holding the stock can use the doji close to their advantage, since the pattern present a short-term pause in the stock's price action. This pause results in an entry point for traders depending of which way the stock resolves this short-term indecision.

The Doji is an important candlestick pattern that provides information on their own and as components in a number of important patterns. Doji form when a security's open and close are virtually equal. The length of the upper and lower shadows can vary and the resulting candlestick looks like a cross, inverted cross or plus sign. Alone, doji are neutral patterns.

Any bullish or bearish bias is based on preceding price action and future confirmation. In the case of Briggs & Stratton, given that the stock finished the session lower, bears should monitor the stock, as it could reverse if it manages to trade above its intraday high. Below a Doji illustration: