Archives for May 2020

The Dow formed a bearish left/right combo on Thursday with a close below the T-line. This was a strong indication that there would be some consolidation/selling, likely to come back and test the 50 day moving average. Today’s trading illustrated the fact that the 50 day moving average appeared to be acting as a support. This did not necessarily mean the downtrend is over, it provides an analysis that might illustrate a slow drifting market trend if the market indexes have a hard time getting back up through the T line. It will be important to see how the markets open tomorrow. A strong bullish day would clearly indicate that most investors the 50 day moving average was going to be a support level. This usually provides bullish confidence, capable of starting another strong uptrend. Today’s bullish trading in the Dow could be considered a piercing signal that used the 50 day moving average as support.

The biotech stocks continue to show very strong up-trends. The medical supply stocks also are showing good strength. Note how APT broke out of a wedge formation on good strength today. This dramatically improves the probabilities of an uptrend starting and a strong uptrend in progress. Having the ability to identify what type of signals or patterns are breaking out through resistance levels provides the candlestick investor with a greater insight into which stock moves are going to have the strongest upside potential. Maintaining long positions during the sideways/drifting market is based on a simple trend factor. As long as the up-trends remain above the T line, the uptrend will remain in progress. Join us this weekend for the two day comprehensive training on candlestick analysis. The multitude of chart analysis produces a completely different and profitable perspective for investors. You will gain valuable insights as to what really moves prices. Click here for more info.

Chat session tonight at 8 PM ET with Kent Savage. Click here to register.

Good investing,

The Candlestick Forum team.

How do you make hay while the sun shines? Candlestick analysis provides a common-sense strategy. First, the analysis of the overall market trend provides the initial analysis. The T-line is an integral part of confirming the continuation of an uptrend after witnessing strong candlestick reversal signals. From that point, it becomes simple scanning processes for finding the strongest sectors, which then leads to identifying the strongest chart patterns of individual stocks from those sectors. A few weeks ago, the biotech stocks showed good strong bullish signals. They are currently producing continued strong price moves, good profits. Other sectors have come into play. Oil stocks are showing uptrends. The retail stocks are starting to show strong bullish patterns. As a candlestick investor, simple scanning techniques make identifying which stocks will likely move the strongest during an uptrend an easy procedure.

Most investors are happy to have a majority of their stocks heading up during an uptrend. However, they may not be in the best bullish stocks in the uptrend and most investors continue to hold losing positions in hopes those positions will eventually turn around and start back up. Candlestick analysis eliminates that hoping process. The common-sense logic built into candlestick analysis produces a discipline. The charts recognize which stock/sectors are not working well so that they can be closed out and moved too much stronger trade potentials. This greatly reduces a mediocre return of a portfolio during an uptrend. It allows an investor to maximize the bullish potentials by having funds in positions that have much greater probabilities of not only moving positive but moving positive with much greater strength. Take advantage of this weekend’s two-day comprehensive candlestick training. It starts with the most basic candlestick training, the 12 major signals. It is then followed by high probability candlestick patterns. Everything built into candlestick analysis is basically common sense put into a graphic depiction. You will learn how to place common-sense stop-loss levels, improved probabilities with simple entry strategies, learn when to take profits, identify the most powerful candlestick signal/pattern combinations and finally learn how to scan for those best trade positions. This comprehensive training will dramatically change how you look at trading.

Chat session tonight at 8 PM ET.

Good investing,

The Candlestick Forum team.

What are the strongest candlestick patterns? This is a question often asked. But there is no correct answer. In these market conditions, the J-Hook pattern’s and the bobble breakouts are working very effectively. Next week or next month it may be fry pan bottom breakouts or best friend signals. All the candlestick signals and patterns illustrate a strong change of investor sentiment. The reason to recognize each one and understand what that signal or pattern is illustrating is important because specific market conditions could make any of those signals and patterns work effectively. There are numerous J hook patterns producing very strong profits in these market conditions.

The J-Hook pattern and the bobble breakout identification are greatly enhanced utilizing the T-line. This can be illustrated in some of our recent recommendations such as LVGO, SP, CDAY. Because investor sentiment works the same way time after time, the J-Hook pattern provides two strong benefits. First, it is easy to recognize as it is setting up. Secondly, the magnitude of the next wave, wave three, can be calculated based upon the magnitude of wave one. They are usually about the same. Recognizing when a J-hook pattern is setting up provides optimal entry strategies. Also, for the option trader, it allows for very profitable options spreads based upon knowing what the upside target is likely to be. Having the ability to recognize the development of a pattern and its price movement dramatically improves the correct trade ratio as well as the profitability of being in price moves that will move much stronger than mere up-trending stock prices. Join us on May 16 and 17th for the two-day comprehensive training on candlestick analysis. You will learn not only to recognize the signals and patterns but you will also understand the psychology that created those signals and patterns. This gives you the same insights into price movements as an investor with 50 years of trading background.

Chat session tonight at 8 PM ET with Stephen Bigalow. Click here to register.

Good investing,

The Candlestick Forum team.

When the market indexes closed below the T-line on Friday, there was a very good probability there will be some more selling consolidation going into the early part of this week. The Dow sold off early but note that it used the 50 day moving average as a support, at the low of the day. The NASDAQ opened lower but immediately started trading higher and closed up almost 100 points for the day. This created a bullish engulfing signal at the T line area. The positive trading in the indexes today made the prognosis of a trend channel remaining in progress. With the NASDAQ closing above the T-line, any positive trading tomorrow would improve the probabilities of the slow uptrend channel continuing. This has made for some very strong J-hook pattern setups.

Add the fact that the big traders, AAPL, NFLX, NVDA, AMZN all traded positive today was another good indication that the bearish sentiment had not taken control. Numerous J-hook patterns developed today in individual stocks, creating high probability bullish trade setups. Numerous J-hook patterns showed that the T-line was continuing to act as support, making the probabilities of the next wave to the upside that much greater. The reason for utilizing candlestick patterns is twofold. First, it produces a high probability direction for the next move, and secondly the magnitude of that move is usually very strong. These are the elements that make utilizing candlestick analysis a much higher probability of not only being in a correct trade, but a strong price move correct trade.

Chat session tonight at 8 PM ET.

Good investing,

The Candlestick Forum team.