Bulls taking Control of Allergan?
Published on Thursday, 14 February 2013 19:03 Written by TradersHuddle Wire
New York, February 14th (TradersHuddle.com) - Shares of Allergan Inc. ( NYSE:AGN) ended the trading session higher by $0.64 or 0.6% from its previous close. Allergan'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.
Allergan, Inc. ( NYSE:AGN) is a multi-specialty health care company that develops and commercializes pharmaceuticals, biologics and medical devices. The company develops products for the ophthalmic, neurological, medical aesthetics, breast aesthetics, obesity intervention, urological and other specialty markets in countries around the world.
Allergan's recent stock range was formed by a trough where calculated support was defined at $87.50 and by a peak that established the resistance level at $107.69. This range could be used by traders managing their positions.
Traders wanting to establish a position in Allergan 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: