Archives for December 2020

The Dow produced a more compelling reversal signal today. After trading higher and resisting at the upper resistance level, the selling started and brought the Dow back down through the T line and created a bearish left/right combo. This would imply higher probabilities that more selling is about to occur. However, although the probabilities favor lower trading, the nature of the market, over the past month, has been indecisive, up one day, down the next. It will be important to see what the premarket futures illustrate as far as how the markets will open tomorrow. Although the NASDAQ was trading higher today, it closed at the lower end of its trading range, creating a Doji type signal. The transportation index traded much lower. This combination of signals produce more evidence of the bears taking control.

The J-hook pattern remains the predominant pattern in these market conditions. Last week the J-hook pattern produce good profits in the oil stocks. Currently, numerous J-hook patterns are forming in biotech stocks. The indecisive nature of the overall market trend continues to make price movements very sector specific. Some sectors are going to be trading stronger while other sectors will be trading lower. This can be easily identified with simple scanning techniques for candlestick patterns. The patterns can also point out which trading stocks have the best upside potential’s, such as TSLA in the process of a J-hook pattern set up. NFLX is in the process of forming a classic pattern, a fry pan bottom pattern followed by a J-hook pattern. Take advantage of the patterns. They illustrate not only a high probability of the direction of a price move but also have the advantage of producing very strong profit moves. This is what provides huge advantages for the candlestick investor.

Chat session tonight at 8 PM ET, identifying the best sectors.

Good investing,

The Candlestick Forum team

The market direction is still indecisive. It has been that way in the Dow for the last three weeks. However, the candlestick investor has the advantage of being able to scan for the strongest sectors as well as the weakest sectors. This is beneficial for having both long and short positions established in the portfolio when there is no decisive market direction. Currently, good bullish chart patterns are identified in the oil stocks APA, OXY , AROC, SM, CPE, XOM, as well as the electric vehicle related stocks, LTHM, BLNK,. Weakness remains in the tech stock area, computer information, i.e.OSTK. Biotech’s that are being benefited by vaccine production still are good uptrending stocks, BNTX, KURA.

The simple scanning techniques applied to candlestick signals allows investors to pinpoint which stock/sectors are going to produce the highest potential profitability. Identifying the strong patterns, such as the J-hook pattern, puts investors in trade situations where the probabilities are extremely strong the next wave is going to produce good profitability. Numerous fry pan bottom patterns are also creating good breakout moves. Recognizing when a pattern is about to breakout produces exact entry point strategies to take advantage of big price moves at the exact appropriate time. The trading logic is very simple. Stay with the strong sectors which continue to trade above the T line. Stay short in the weak sectors as long as they continue to trade below the T line. This is not rocket science.

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

Good investing,

The Candlestick Forum team.

The nature of the market trend is much better analyzed with candlestick graphics. The current uptrend, albeit slow, is providing very strong pattern profit potential. Currently, the J-hook pattern is producing strong profits. These market conditions allow for taking advantage of strong candlestick patterns without the concern of bearish investor sentiment diminishing the upside potential. The oil sector is producing strong J-hook set ups. A candlestick pattern provides numerous benefits. First, the direction is highly probable, followed by a strong price move.

BLNK and VERI have formed J-hook patterns which further confirm a classic pattern. The classic pattern is a fry pan bottom breakout followed by a J-hook pattern. This combination produces extremely high probabilities of excessive more upside. Because investor sentiment works the same way time after time, utilizing the information built into candlestick signals allows for constantly putting investment funds in high profit/high probability trades.

Chat session tonight at 8 PM ET, identifying the best sectors.

Good investing,

The Candlestick Forum team