Archives for August 2020

The strength of a trend is much more clearly illustrated using candlestick formations. The Dow broke out of a wedge formation. It was more evident to a candlestick investor based upon the Doji/hammer signals that bounced up off the 50-day moving average last week, followed by a gap up above the T-line. More bullish confirmation was illustrated on Wednesday when the Dow gapped up through the top of the wedge resistance level. At the same time, the NASDAQ gapped up through the previous all-time high with a Doji sandwich formation. Knowing what to expect after candlestick signals allow an investor to move much more aggressively. The simple candlestick scanning techniques allow for identifying which stocks/sectors will be moving the strongest during a strong uptrend. This is basically putting all the probabilities in one’s favor, knowing what the expected results are of human nature, candlestick signals, and patterns.

The gold stocks have produced good profits over the past few weeks. Additionally, pattern breakouts from frypan bottom’s and slow curve have created some very strong profits. The Best Friend signal has produced good breakout trades in DKS, RRC, and now looks for a good price move from that same pattern in FCX. Steady uptrends are illustrated in positions such as AAPL and OSTK merely using the T-line as a support level. Wedge breakout patterns are working effectively as in GSX. Closing out bad trades quickly is based upon simple common sense aspects of candlestick analysis. It also allows an investor to maintain profitable trades until it is time to sell, the proverbial cut your losses short and let your profits run scenario. This is made easy using candlestick signals.

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Good investing,

The Candlestick Forum team

The positive trading, after the Doji/hammer signals created on Friday, was a strong probability indication the markets were going to be trading higher. Additionally, the bullish trading brought all the indexes back up above the T-line. The gap-up/best friend signal that formed in the Dow Today actually opened at the T-line and traded higher. This has very bullish implications. Candlestick patterns, such as the Doji sandwich, left/right combo, and the slow curve pattern have produced very strong price moves in these market conditions. Candlestick analysis allows investors to not only identify the direction of a price move but also allows for identifying the strong price move potentials.

Knowing the results of a Doji sandwich creates a 2+2 analysis. This is recognizing when a candlestick signal confirmation is also going to create a good pattern breakout. This was utilized in our recommendation on APPS, a Doji sandwich signal that would indicate a breakout into new territory. Witnessing bullish signals at the breakout level of a wedge pattern will produce a high probability/high-profit trade. Our recommendation to buy on positive trading on CRTO and GSX was based upon the ultimate timing to buy as a wedge breakout was confirmed. Knowing what to expect, from candlestick signals result in executing trades that will also have strong pattern breakout results. Human nature works the same way time after time. Take advantage of the information built into each candlestick signal. This dramatically improves the probability of being in a correct trade direction as well as being in a strong profit trade.

Chat session tonight at 8 PM ET.

Good investing,

The Candlestick Forum team.