FlowTrades Blog Articles

Bulls taking Control - Polo Ralph Lauren?

Shares of Polo Ralph Lauren Corporation (NYSE:RL) ended the trading session higher by $0.32 or 0.39% from its previous close. Polo Ralph Lauren's price action formed what is considered to be a bullish engulfing candle that could very well signal continuation of trend or reversal on ongoing weakness.

Polo Ralph Lauren Corporation (NYSE:RL) designs, markets, and distributes men's, women's and children's apparel, accessories, fragrances, and home furnishings. The Company's products are sold under a wide range of brands. Polo Ralph Lauren Corporation was founded in 1967 and is based in New York, New York.

Polo Ralph Lauren's recent stock range has been formed by a trough where calculated support was defined at $79.23 and by a peak that established the resistance level at $83.78, which could be used by traders planning their trades.

Traders wanting to establish a position in Polo Ralph Lauren 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 stepped in.

eBay Near Key Resistance Area

Shares of eBay Inc. (NASDAQ:EBAY) are traded very close to calculated resistance at $22.63 on Friday's session. The stock closed at $21.50, placing the stock near levels that make it difficult to buy.

eBay Inc. (NASDAQ:EBAY) operates an online auction community. The service is used to buy and sell products and services such as coins, collectibles, computers, memorabilia, stamps and toys, and sporting tickets. eBay also offers, through its subsidiary PayPal, secure online payment services.

eBay's current stock range is defined by current calculated support defined at $19.92 and by the resistance level at $22.63, the stock is clearly over-extended from support, making it difficult to establishing new long positions at this level.

Traders don't have a clear entry point for eBay, as the stock is well above support, however, as the stock pulls back towards $19.92 it will definitely provide a reference point to establish a trade. On the other hand if the stock decides to break above resistance level at $22.63 then traders will get an opportunity to enter eBay stock by establishing a position as the stock moves to a higher range.

DuPont Doji Close

Shares of E.I. DuPont de Nemours & Co. (NYSE:DD) closed Thursday's trading sesison higher by $0.24 or 0.6%. DuPont's shares price action formed what is considered to be a doji close, where the open and close prices are very close to each other, mainly signaling an indecision between buyers and sellers.

E. I. Du Pont de Nemours and Company is a global chemical and life sciences company, with businesses that include agriculture and industrial biotechnology, chemistry, biology, materials science and manufacturing. The Company operates globally and offers a wide range of products and services for markets including agriculture and food, building and construction, electronics and communications. DuPont, with 60,000 employees worldwide, was founded in 1802 and its headquartered in Wilmington, DE

Dupont's current stock range is defined by a trough, which marks calculated support at $35.61 and by a peak that marked the resistance point at $41.14. These levels are closely watched by traders managing their positions.

Traders wanting to establish a position in Dupont or traders that are already holding the stock can use the doji close to their advantage, since the pattern present a short term pause in the stock's price action. This pause results in an entry point for traders depending of which way the stock resolves this short term indecision.

Doji are important candlesticks that provide information on their own and as components in a number of important patterns. Doji form when a security's open and close are virtually equal. The length of the upper and lower shadows can vary and the resulting candlestick looks like a cross, inverted cross or plus sign. Alone, doji are neutral patterns.

Tweezer Bottom in Valero

Shares of Valero Energy Corporation (NYSE:VLO) ended Friday's trading session lower by $0.06 or -0.35% from its previous close. Valero'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 the price action for confirmation.

Valero Energy Corporation (NYSE:VLO) is an independent petroleum refining and marketing company that owns and operates refineries in the United States, Canada, and Aruba. The Company produces conventional gasolines, distillates, jet fuel, asphalt, and a series of petrochemicals and lubricants.

Traders looking for an entry in Valero 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 are always looking for tweezer bottoms as they give an entry with a small risk defined, they are a leading indicator that provides 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.

Bullish Reversal Pattern - Starbucks

Shares of Starbucks Corporation (NASDAQ:SBUX) ended Friday's trading session higher by $0.13 or 0.5% from its previous close.

Starbucks' price action in today's session formed what is considered to be a Hammer, where bears drove prices lower intraday. However, the strong finish indicates that bulls regained control forming a trend reversal.

Starbucks Corporation (NASDAQ:SBUX) retails, roasts, and provides its own brand of specialty coffee. The Company operates retail locations worldwide and sells whole bean coffees through several distribution channels. Starbucks also produces and sells bottled coffee drinks.

Starbucks' stock has been trading in a well defined range with support at $23.47 and resistance at $28.5, this range is also being used by traders to plan their positions.

Traders wanting to establish a position in Starbucks or traders that are already holding the stock can use the hammer formation to their advantage, since the pattern signal a potential bullish trend reversal.

Hammers are important candlesticks as they mark bottoms and support levels. Further buying pressure, and preferably on expanding volume, is needed before acting, as heavy volume will serve to confirm the validity of the reversal.

In the case of Starbucks, traders who want to add to their positions or start a new position, need to watch for confirmation of the reversal.

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