Thomson Reuters (TRI - Get Report) is another beaten-down name that's showing traders an ostensibly bullish setup right now. TRI is currently forming an inverse head and shoulders pattern, a setup that indicates exhaustion among buyers. With shares down close to 28% in the last 12 months, sellers certainly have a lot to be exhausted about.
Here's how to trade this financial firm.
An inverse head and shoulders is spotted by three "troughs" forming in shares: two "shoulders" that bottom around the same level and a "head" between them that bottoms lower. The resistance level that restrains the pattern to the upside is called the neckline; in TRI's case, that price is $30. It makes sense to take a long position in shares once this stock is able to breakout above the neckline.TRI has flirted with $30 a couple of times in the last month, but the breakout was never confirmed by two consecutive closes above that neckline price. That's the condition traders should be looking for before they go long.