and The Candlestick Forum
The budget vote has continued the Bullish sentiment in this market. The transportation index is showing a very compelling J-hook pattern above the T-line. The market trend analysis remains very simple, as long as the indexes continue to trade above the T-line, the uptrend is still in progress. The warning is still coming from the Dow, gapping up again in the overbought condition. Be defensive, the first signs of a sell signal should induce profit-taking.
Yesterday’s gap up in the Dow required continued bullish trading Today. Today’s lower open makes Yesterday’s Gap up an indication of exhaustion at the top. The gap down in the NASDAQ and the S&P 500, after Yesterday’s indecisive trading in those indexes, indicates a strong change of investor sentiment. Close out long positions that are showing definite sell signals. Be ready to scan for short positions Today or after the close this evening.
Chart for GWW
Over the next 13 weeks, Grainger has on average historically risen by 5.8% based on the past 45 years of stock performance.
Grainger has risen higher by an average 5.8% in 28 of those 45 years over the subsequent 13 week period,corresponding to a historical probability of 62%
The holding period that leads to the greatest annualized return for Grainger, based on historical prices, is 9 weeks. Should Grainger stock move in the future similarly to its average historical movement over this duration, an annualized return of 25% could result.
Chart for KMG
Over the next 13 weeks, KMG Chemicals Inc. has on average historically risen by 10.3% based on the past 20 years of stock performance.
KMG Chemicals Inc. has risen higher by an average 10.3% in 11 of those 20 years over the subsequent 13 week period,corresponding to a historical probability of 55%
The holding period that leads to the greatest annualized return for KMG Chemicals Inc., based on historical prices, is 15 weeks. Should KMG Chemicals Inc. stock move in the future similarly to its average historical movement over this duration, an annualized return of 48% could result.
Chart for UNH
Over the next 13 weeks, United Health has on average historically risen by 9.2% based on the past 32 years of stock performance.
United Health has risen higher by an average 9.2% in 25 of those 32 years over the subsequent 13 week period,corresponding to a historical probability of 78%
The holding period that leads to the greatest annualized return for United Health, based on historical prices, is 20 weeks. Should United Health stock move in the future similarly to its average historical movement over this duration, an annualized return of 45% could result.
What is the danger signal today? Note that the Dow has gapped up in the overbought condition. What does this illustrate? Exuberance in the overbought condition. The NASDAQ and the S&P 500 are not demonstrating the same bullish consensus. Watch the Dow. If it starts selling off from these levels, be prepared to start taking profits. The Dow has to maintain its strength Today to not demonstrate a reversal in the overall market trends.
What do candlestick charts actually reveal? NFLX beat earnings, things look great, logic says the stock should open and trade higher. But what did it do? Opened lower and traded lower. Candlestick charts show what investors are actually doing, which sometimes is completely different than what WE think a price should be doing. Let the market tell you what the market is doing. Currently the market indexes appear to be running out of steam but they are not showing any selling pressure. Stay long but be ready to take profits on long positions. This is why we recommend Trend Analysis.
Chart for ACLS
Over the next 13 weeks, Axcelis Technologies Inc. has on average historically risen by 12.7% based on the past 17 years of stock performance.
Axcelis Technologies Inc. has risen higher by an average 12.7% in 12 of those 17 years over the subsequent 13 week period,corresponding to a historical probability of 70%
The holding period that leads to the greatest annualized return for Axcelis Technologies Inc., based on historical prices, is 1 week. Should Axcelis Technologies Inc. stock move in the future similarly to its average historical movement over this duration, an annualized return of 159% could result.
Chart for FPRX
Over the next 13 weeks, FIVE PRIME THERAPEUTICS has on average historically risen by 69.2% based on the past 4 years of stock performance.
FIVE PRIME THERAPEUTICS has risen higher by an average 69.2% in 3 of those 4 years over the subsequent 13 week period,corresponding to a historical probability of 75%
The holding period that leads to the greatest annualized return for FIVE PRIME THERAPEUTICS, based on historical prices, is 3 weeks. Should FIVE PRIME THERAPEUTICS stock move in the future similarly to its average historical movement over this duration, an annualized return of 290% could result.
Chart for GRVY
Over the next 13 weeks, GRAVITY Co., Ltd. has on average historically fallen by 5.3% based on the past 12 years of stock performance.
GRAVITY Co., Ltd. has fallen lower by an average 5.3% in 8 of those 12 years over the subsequent 13 week period,corresponding to a historical probability of 66%
The holding period that leads to the greatest annualized return for GRAVITY Co., Ltd., based on historical prices, is 22 weeks. Should GRAVITY Co., Ltd. stock move in the future similarly to its average historical movement over this duration, an annualized return of 108% could result.
Chart for TSE
Over the next 13 weeks, Trinseo SA has on average historically risen by 8.8% based on the past 3 years of stock performance.
Trinseo SA has risen higher by an average 8.8% in 3 of those 3 years over the subsequent 13 week period,corresponding to a historical probability of 100%
The holding period that leads to the greatest annualized return for Trinseo SA, based on historical prices, is 36 weeks. Should Trinseo SA stock move in the future similarly to its average historical movement over this duration, an annualized return of 88% could result.
Although the indexes are trading higher this morning, they are trading at the same levels as where they opened, creating Doji’s. The Dow has formed Doji’s each day for the past few days. The S&P 500 and NASDAQ have traded higher over the past few trading days but closing below where they opened. This indicates the Bullish strength of this uptrend is starting to diminish. Stay long but be careful. Having a few short positions in the portfolio is still prudent.
Investor sentiment has not changed. The slow uptrend in the overall markets continue to make the analysis of individual stock charts more relevant. Continue to stay in the Bullish charts that remain above the T-line. Remain in bearish positions, such as CMCSA, as long as they stay below the T-line and are not showing any bullish reversal signals. These market conditions will have both long and short positions that are profitable.
October 23rd Daily Market Comments
Today’s lack of strength in the market indexes have not done anything to alter the candlestick bullish patterns that have developed over the past few trading days. All the indexes continue to trade above the T-line but the NASDAQ is not showing any great strength, currently forming a bearish engulfing signal and trading right on the T-line. Although the markets are still in an uptrend, there are signs of weakness. Continue to stay predominantly long but be prepared to take profits if all the indexes start showing weakness at the same time.