New York, November 29th (TradersHuddle.com) - Shares of Wal-Mart Stores, Inc. (NYSE:WMT) ended the trading
session higher by $1.02 or 1.47% from its previous close. Wal-Mart'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.
Wal-Mart Stores, Inc. (NYSE:WMT) operates discount stores, supercenters, warehouse membership clubs, and neighborhood markets. The Company's stores sale products like general merchandise, apparel, electronics and groceries. Wal-Mart operates the warehouse membership stores under the Sam's Club name, where the company sell assorted merchandise including its private label products. Wal-Mart was founded by Sam Walton in 1945 and is based in Bentonville, Arkansas.
Wal-Mart's recent stock range was formed by a trough where calculated support was defined at $67.66 and by a peak that established the resistance level at $75.19. This range could be used by traders managing their positions.
Traders wanting to establish a position in Wal-Mart 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: