and The Candlestick Forum
Have the markets bottom? That is a hard question to answer based upon the daily chart. However, it can already be assumed that with such a hard selloff over the last few days, there might be some buying stepping in. But how do we know if that is a full-scale bottoming action or merely a bounce? Simple, watch your 10 minute chart. Currently the Dow 10 minute chart is illustrating that any buying occurring so far today has run into resistance at the 10 minute chart T line. Until the 10 minute chart illustrates the Bulls taking control, maintain the short positions.
Chart for EBAY
Over the next 13 weeks, eBay has on average historically risen by 15.2% based on the past 19 years of stock performance.
eBay has risen higher by an average 15.2% in 13 of those 19 years over the subsequent 13 week period,corresponding to a historical probability of 68%
The holding period that leads to the greatest annualized return for eBay, based on historical prices, is 9 weeks. Should eBay stock move in the future similarly to its average historical movement over this duration, an annualized return of 65% could result.
Chart for QRVO
Over the next 13 weeks, Qorvo Inc has on average historically risen by 7.3% based on the past 3 years of stock performance.
Qorvo Inc has risen higher by an average 7.3% in 2 of those 3 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 Qorvo Inc, based on historical prices, is 8 weeks. Should Qorvo Inc stock move in the future similarly to its average historical movement over this duration, an annualized return of 95% could result.
Be careful! Although a couple of the major indexes, after opening much lower, are now trading slightly positive. But this is not creating any candlestick reversal signals. The fact that the stochastics are still heading down causes some suspicion that the market has not yet bottomed out. The 50 day moving average is showing some relevancy for the transportation index but the remaining indexes are merely trading positive from where they opened. A bounce? It will be important to see how the indexes close today. Stay predominantly short until there are definite reversal signals in the indexes.
The use of logical stop’s produces a natural reversal in the portfolio positioning. Over the past week, profitable bullish trades were stopped out. Potential new bullish trades usually did not execute based upon lower opens but at the same time short trades were executed. This created a natural change from being predominantly long to being predominantly short in the portfolio. At one time, scanning for new trades was heavily directed toward long positions based upon the market indexes trading above the T-line. Adding a few short positions to the portfolio was viable based upon the markets be in overbought.
The hard selling on Tuesday is still having a residue of fact on investor sentiment, taking the assumed and consistent bullish sentiment out of the market trend. However, as demonstrated in yesterday’s and today’s trading, that although the buying has been stymied, there is no great selling pressure. This is apparent with the NASDAQ currently trading positive, the S&P 500 trading relatively flat, and the Dow down slightly.
Chart for MDGL
Over the next 13 weeks, Madrigal Pharmaceuticals has on average historically fallen by 5% based on the past 10 years of stock performance.
Madrigal Pharmaceuticals has fallen lower by an average 5% in 5 of those 10 years over the subsequent 13 week period,corresponding to a historical probability of 50%
The holding period that leads to the greatest annualized return for Madrigal Pharmaceuticals, based on historical prices, is 52 weeks. Should Madrigal Pharmaceuticals stock move in the future similarly to its average historical movement over this duration, an annualized return of 67% could result.
February 7th Daily Market Comments
There were numerous bullish signals yesterday, many bullish engulfing signals and piercing signals. Today there is a lot of follow-through, bouncing prices back up toward T-line’s. But be careful, the T-line remains a very relevant indicator for the confirmation of price moves back in a positive direction. After severe selling in the markets and individual stocks, it will not be unusual to see some waffling below the T-line for the next few days. Any bullish trades placed today should be done with the anticipation of moving back out of those trades very quickly if the buying is not maintained. Numerous short positions should have been covered today with the confirmation of bullish reversal signals yesterday. Remain nimble until the indecisive nature of the market establishes more upside or whether this is merely a quick bounce.