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Diodes Sees Hammer Chart Pattern: Time to Buy?

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Diodes Incorporated (DIOD - Free Report)  has been struggling lately, but the selling pressure may be coming to an end soon. That is because DIOD recently saw a Hammer Chart Pattern which can signal that the stock is nearing a bottom.

What is a Hammer Chart Pattern?

A hammer chart pattern is a popular technical indicator that is used in candlestick charting. The hammer appears when a stock tumbles during the day, but then finds strength at some point in the session to close near or above its opening price. This forms a candlestick that resembles a hammer, and it can suggest that the market has found a low point in the stock, and that better days are ahead.

Other Factors

Plus, earnings estimates have been rising for this company, even despite the sluggish trading lately. In just the past 60 days alone 1 estimate has gone higher, compared to none lower, while the consensus estimate has also moved in the right direction.

Estimates have actually risen so much that the stock now has a Zacks Rank #1 (Strong Buy) suggesting this relatively unloved stock could be due for a breakout soon. This will be especially true if DIOD stock can build momentum from here and find a way to continue higher of off this encouraging trading development. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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