EOG Resources Formed a Hammer Candlestick Pattern

Published on Friday, 28 December 2012 04:12 Written by TradersHuddle Wire

New York, December 28th (TradersHuddle.com) - Shares of EOG Resources, Inc. (NYSE:EOG) ended the trading session lower by $0.81 or -0.67% from its previous close. EOG Resources' price action in the session formed what is considered to be a Hammer, where bears drove prices lower intraday. However, the strong finish indicates that bulls regained control, forming a trend reversal.

EOG Resources, Inc. (NYSE:EOG) develops, produces and markets natural gas and crude oil. The Company operates in major producing basins in the United States, Canada, Trinidad, the United Kingdom North Sea, and China

EOG Resources' stock has been trading in a well defined range with calculated support at $112.72 and resistance at $124.50. This range can be used by traders to plan their next moves.

Traders wanting to establish a position in EOG Resources or traders that are already holding the stock can use the hammer formation to their advantage, since the pattern signal a potential bullish trend reversal.

The Hammer is an important candlestick pattern, as it can mark bottoms and support levels. Further buying pressure, and preferably on expanding volume, is needed before acting, as heavy volume will serve to confirm the validity of the reversal.

In the case of EOG Resources, traders who want to add to their positions or start a new position, need to watch for confirmation of the reversal. Below a Hammer illustration: