Archives for January 2020

The uptrend continues to experience profit-taking which keeps exuberance from being exhibited. Today’s lower trading in the markets, although not very aggressive, has the transportation index showing strongest selling. The trend still produces the analytical process of identifying individual stocks/sectors as the top criteria. As always, safety stops be kept in place as the trend continues will in the overbought condition.

The trend sentiment has not changed. The slow uptrend of today indicates the lack of exuberance. The slow calculated buying creates a much more solid parameter for the uptrend. Continue to stay long, utilizing each individual chart analysis as the top criteria. Numerous J-hook patterns are working very profitably. The uptrend continues until there is the appearance of a reversal signal.

Bullish investor sentiment is still obvious. Trading above the T-line makes that more apparent. The trading strategy remains the same, stay predominately long as long as each individual stock position does not show sell signals and a close below the T-line. More than likely, most bullish positions moving in a steady uptrend are showing to be in the over bought condition, so have safety stops in place. Investment decisions are demonstrating bullishness based upon economic factors versus impeachment factors.

The indexes are trading mixed, the Dow is up, the NASDAQ is down, the transportation index showing good strength. This merely indicates funds shifting around versus any major change of investor sentiment. The uptrend remains in progress. Continue to stay long in positions that are not showing any sell signals in closing below the T-line, a very simple trend strategy.

The indexes form potential sell signals on Friday at the upper resistance level. Although the current trading is showing positive Today for the indexes, be on alert. The indexes need to maintain bullish trading going into the close today to illustrate the uptrend is likely to keep nudging the upper resistance level. Because the market indexes are at levels where there is the possibility of profit-taking, continue to analyze each individual stock chart on its own merits. Be prepared to take some profits in positions that have had strong price moves. Look for rotating into other sectors.

The uptrend remains in progress! Some of the talking heads are suggesting this market has now gotten into the exuberance stage. The candlestick charts do not demonstrate any exuberance. Utilizing the T-line as a trend indicator provides a couple of important illustrations. First, it acts as a natural support resistance level with candlestick signals. As long as the indexes continue to trade above the T-line the uptrend is assumed to be in progress. But another aspect of the T-line also reveals when exuberance has started to come into the markets. This is illustrated when the market indexes start moving excessively above the T-line. However, that has not yet occurred. Although the market uptrend has been extensive, it can be visually evaluated that profit-taking has occurred along the way, sometimes intraday as well as occurring in a few days of pullback before the uptrend continues. A steady uptrend in the markets will usually consist of some stock/sectors moving positive while other sectors start backing off. The simple scanning techniques for finding the strongest candlestick trades allows investors to continually take profits in the sectors that have already moved and reallocate funds to the sectors that are showing new strong buy signals.

An additional benefit of candlestick analysis is identifying the signals and patterns that are going to produce the most strongest profitable trades during an uptrend when many stocks are slowly rising in a rising tide. LK is an example of a fry pan bottom/classic pattern that is producing excellent profits based upon our recommendation identifying the fry pan bottom pattern. Profitable option trades can be made with much more confidence in price trends as exhibited in AAPL, maintaining positions as long as it continues to trade above the T line. Simple common sense rules allow investors to dramatically improve their profitability when understanding that investor sentiment works the same way time after time. All boats rise in a rising tide. Simple candlestick scanning techniques allow investors to find the boats that are going to rise a lot faster.

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Good Investing,

The Candlestick Forum Team