Bulls in Charge of O'Reilly

Published on Thursday, 22 November 2012 04:33 Written by TradersHuddle Wire

New York, November 22nd (TradersHuddle.com) - Shares of O'Reilly Automotive, Inc. (NASDAQ:ORLY) ended the trading session higher by $0.18 or 0.2% from its previous close. O'Reilly'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.

O'Reilly Automotive, Inc. (NASDAQ:ORLY) retails and supplies automotive aftermarket parts, tools, supplies, equipment, and accessories. The Company sells its products to do-it-yourself customers and professional mechanics or service technicians throughout the United States.

O'Reilly's recent stock range was formed by a trough where calculated support was defined at $78.58 and by a peak that established the resistance level at $92.41. This range could be used by traders managing their positions.

Traders wanting to establish a position in O'Reilly 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: