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Richardson Electronics (RELL) appears to have found support after losing some value lately, as indicated by the formation of a hammer chart. In addition to this
A downtrend has been apparent in Richardson Electronics (RELL) lately. While the stock has lost 15.6% over the past week, it could witness a trend reversal as a hammer chart pattern was formed in its last trading session. This could mean that the bulls have been able to counteract the bears to help the stock find support.
While the formation of a hammer pattern is a technical indication of nearing a bottom with potential exhaustion of selling pressure, rising optimism among Wall Street analysts about the future earnings of this electronic components and communication products company is a solid fundamental factor that enhances the prospects of a trend reversal for the stock.
This is one of the popular price patterns in candlestick charting. A minor difference between the opening and closing prices forms a small candle body, and a higher difference between the low of the day and the open or close forms a long lower wick (or vertical line). The length of the lower wick being at least twice the length of the real body, the candle resembles a 'hammer.'
