Tellabs Bullish Engulfing Formed
Published on Wednesday, 06 February 2013 17:42 Written by TradersHuddle Wire
New York, February 6th (TradersHuddle.com) - Shares of Tellabs, Inc. (NASDAQ:TLAB) ended the trading session higher by $0.04 or 1.9% from its previous close. Tellabs' 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.
Tellabs, Inc. (NASDAQ:TLAB) designs, manufactures, sells, and services voice, data, and video transport and network access systems. The Company's products are used worldwide by public telephone companies, long-distance carriers, alternate service providers, cellular service providers, cable operators.
Tellabs' recent stock range was formed by a trough where calculated support was defined at $2.01 and by a peak that established the resistance level at $2.34. This range could be used by traders managing their positions.
Traders wanting to establish a position in Tellabs 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: