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Possible Bearish Inside Day Candle Pattern Detected for Gerdau (NYSE:GGB)

By Shiri Gupta

SmarTrend's candlestick scanner has spotted a possible bearish inside day candle pattern in Gerdau (NYSE:GGB) based on the price action in the company's shares. Today's price range of $4.95 and $5.05 is within yesterday's high and low of the day. This trading action often signifies indecision by bulls and bears to drive prices higher or lower and often implies a possible change in trend. Owners of Gerdau may want to consider a possible hedge in the event a pullback occurs. Look for confirmation in the next few trading days.

Gerdau has overhead space with shares priced $5.00, or 25.7% below the average consensus analyst price target of $6.73. The stock should run into initial resistance at its 50-day moving average (MA) of $5.55 and subsequent resistance at its 200-day MA of $6.24.

Gerdau S.A. manufactures steel. The Company produces crude, long, specialty, rolled, and drawn steel products. Gerdau manufactures its steel primarily in mini-mills. The Company operates in Brazil, Uruguay, Chile, Argentina, Canada, and the United States.

In the past 52 weeks, shares of Gerdau have traded between a low of $4.69 and a high of $8.41 and are now at $5.00, which is 7% above that low price. Over the past week, the 200-day moving average (MA) has gone down 0.7% while the 50-day MA has declined 1.3%.

SmarTrend recommended that its subscribers protect gains by selling shares of Gerdau on June 30th, 2014 by issuing a Downtrend alert when the shares were trading at $5.86. Since that call, shares of Gerdau have fallen 15.8%. We are now looking for when a new Uptrend will commence and will alert SmarTrend subscribers in real time.

Keywords: bearish inside day candle gerdau

Ticker(s): GGB