Archives for November 2019

The anticipation of the markets continuing higher was illustrated by the indecisive candlestick formations supporting on the T-line. This simple visual analysis allows a candlestick investor to assess the strength of the selling during a pullback/downtrend. Today’s positive trading confirmed the T-line was going to continue to act as a support and illustrated J-hook patterns in the major indexes. The J-hook pattern implies more upside, adding additional evidence the uptrend remains in progress. Because the candlestick signals and patterns are the accumulative buying and selling decisions of investors, having the reason for why the markets are trading higher is not required when doing candlestick analysis. Identifying the reoccurring patterns and price movements is all a candlestick investor needs to interpret. The lack of trade agreements, impeachment hearings, Washington indictments, are not affecting investor decisions. The importance of candlestick analysis is merely evaluating that investors are currently buying.

Price trend analysis can be accurately enhanced by knowing what each individual candlestick signal is revealing during the development of a price pattern. Additionally, the appearance of individual candlestick signals at important support and resistance levels merely reveals to the candlestick investor what the major decisions were made at those levels. As illustrated in our recommendation on ZM, a trend kicker signal, a very strong bullish signal, occurred right at a frypan bottom breakout level which coincided with a 50 day moving average. Identifying a combination of candlestick analysis factors dramatically improves the probabilities of being in the correct direction as well as a strong price move. Analyzing a price move after a breakout situation is much more accurately evaluated based upon simple trend analysis incorporating the T line. Having the ability to analyze the overall market direction dramatically improves the probabilities of being in strong bullish candlestick patterns. The magnitude of the moves of a pattern breakout is much greater than merely holding uptrending stocks during an uptrend.

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Good Investing,

The Candlestick Forum Team

The potential consolidation was evidenced when the Dow formed a bearish engulfing signal in Tuesday’s trading. The NASDAQ formed a Doji that day, also providing better evidence of a reversal in the market trend on a lower open after the Doji. The appearance of candlestick signals allows investors to make a much more accurate assessment as to what the overall trend of a move will likely produce based upon the results of individual signals during the trend. When using that information in conjunction with the T line, taking profits can be instigated but now watching to see what the overall markets are doing at the T line level. This makes for a very simple if/then analysis. If the premarket futures indicate a lower market open tomorrow, the likelihood of the continued downtrend is very great. Positive trading tomorrow reveals the T line continuing to act as an uptrending support level.

The T line, acting as a natural support or resistance level of human nature, provides a much better trend analytical decision-making factor based upon the T line rule, an uptrend can be maintained after a bullish candlestick signal and a close above the T line. That trade can stay in progress until you see a candlestick sell signal and a close below the T line. It also allows for much greater profitability when applying the analysis of individual signal confirmation at the T line area.

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Good Investing,

The Candlestick Forum Team

The graphics of candlestick signals in conjunction with an extremely accurate trend indicator, the T-line, dramatically reduces emotional stress and decision-making. The logic is built into each individual candlestick formation allows the candlestick investor to much more accurately assess what the investor sentiment is doing during a trend and/or at the reversals of a trend. This could easily be seen when the Dow broke out of the wedge type trading range of the past few months. The breakout candles did not show any hesitancy going through the resistance levels, almost a bullish kicker signal through that level. This indicated there was going to be more upside after it broke out. The information built into each candlestick signal or formation allows for a much more accurate evaluation of what the strength of the next price move will be, whether analyzing the market indexes or an individual stock chart. Logic dictates that if the overall market trend can easily be evaluated, such as a clear indication more upside in the markets is expected based upon the candlestick charts, investing in the strong individual stock charts produces much more profitability by expecting the results of a candlestick pattern breakout to provide big profits without bullish sentiment being diminished by the overall market appearing to head lower. The current market trend has not demonstrated any sell signals nor traded back below the T-line. The assumption remains that the uptrend is still in progress.

The information built into each candlestick signal reveals exactly what is going on in investor sentiment at observable support and resistance levels. The bullish Harami illustrating the selling had stopped in NFLX right at the 50 day moving average support level. The bullish Harami provides an extremely high probability trades set up knowing what the signal illustrated. Having the ability to analyze what the investor sentiment is doing at levels that everybody else’s watching allows the candlestick investor to enter trades much earlier in a profitable trade than other trading strategies. After entry, price patterns and/or the use of the T-line greatly enhances the profitability of a trade.

We will conduct a “Members Only” chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team