Bulls taking over on Tellabs?
Published on Wednesday, 20 February 2013 20:12 Written by TradersHuddle Wire
New York, February 20th (TradersHuddle.com) - Shares of Tellabs, Inc. (NASDAQ:TLAB) ended the trading session lower by $0.03 or -1.39% from its previous close. Tellabs' 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.
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.
Traders looking for an entry in Tellabs 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:
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