Broadcom Short term Bullish Reversal
Published on Friday, 02 November 2012 04:54 Written by TradersHuddle Wire
New York, November 2nd (TradersHuddle.com) - Shares of Broadcom Corporation (NASDAQ:BRCM) ended the trading session higher by $0.5 or 1.59% from its previous close. Broadcom'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.
Broadcom Corporation (NASDAQ:BRCM) provides integrated silicon solutions that enable broadband, digital data transmission of voice, data, and video content to home and within the business enterprise. The Company designs, develops, and supplies integrated circuits for cable set-top boxes, cable modems, high-speed networking, direct satellite and digital broadcast, and digital subscriber line.
Broadcom's recent stock range was formed by a trough where calculated support was defined at $31.29 and by a peak that established the resistance level at $34.89. This range could be used by traders managing their positions.
Traders wanting to establish a position in Broadcom 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:
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