New York, May 1st (TradersHuddle.com) - Shares of Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) ended the trading session higher by $0.46 or 1.92% from its previous close. Schnitzer'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.
Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) operates a steel scrap recycling business in the United States. The Company supplies ferrous scrap to export and domestic steel producers through its scrap collection, processing, and deep water facilities. Schnitzer also operates collection and processing facilities, as well as manages other facilities through joint ventures. Schnitzer is one of the largest recyclers of scrap metal in the U.S., and a leading provider of used and recycled auto parts.
Schnitzer's recent stock range was formed by a trough where calculated support was defined at $23.07 and by a peak that established the resistance level at $24.69. This range could be used by traders managing their positions.
Traders wanting to establish a position in Schnitzer Steel 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: