Group 1 Automotive: Ready for some Upside?
Published on Monday, 31 December 2012 04:57 Written by TradersHuddle Wire
New York, December 31st (TradersHuddle.com) - Shares of Group 1 Automotive, Inc. (NYSE:GPI) ended the trading session lower by $0.2 or -0.33% from its previous close. Group 1'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.
Group 1 Automotive, Inc. (NYSE:GPI), through its subsidiaries, owns and operates automobile dealerships. The Company sells new and used cars and light trucks, provides maintenance and repair services, and sells replacement parts. The Company also arranges related financing, insurance, and extended service contracts. Group 1 operates in the United States and the United Kingdom.
Traders looking for an entry in Group 1 Automotive 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: