and The Candlestick Forum
The ShootingStar failure of the Dow at the upper trend channel resistance level produced good probabilities that a reversal could be in effect. The magnitude of today’s selling is the reflection of a change of investor sentiment that had already been in progress in the NASDAQ. Unless long positions are showing good strength, the Long’s should be closed and more short positions added.
Today’s shooting star signal in the Dow and transportation index illustrates the bears starting to take control. A lower open in the Dow tomorrow would confirm the trend has reversed. This does not necessarily mean a full-scale reversal, but the prospects of profit-taking back to the T line. Add the fact that the NASDAQ is still in a strong downtrend and the S&P 500 sold off hard today makes the trading strategy-oriented more toward the short side.
Remember the common sense logic of the Japanese rice traders. Where do most people buy? Exuberantly at the top! This was indicated in the gap up shooting star/Doji’s in our recommendations of NUE and HZO. The gap up in the overbought area, away from the T line, was the alert for starting to take profits. Candlestick analysis provides common sense trading strategies. The probabilities are dramatically in your favor when you know what alerts to look for when taking profits. Short positions can be added to the portfolio upon weakness in the market indexes tomorrow.
Chat session tonight at 8 PM ET.
Good investing,
The Candlestick Forum team
Although the Dow, S&P 500, and the transportation index continue to trade positive, the failure of the NASDAQ to close above the T line on Friday produced a warning. The nature of the market remains the same, the uptrend remains in progress but the high tech stocks of the NASDAQ are still being sold off. The strategy remains the same, have both long and short positions in place.
The strength in the Dow and the S&P 500 continues to make candlestick pattern breakouts producing very good profits. The transportation index also is producing sectors creating good profits. Although the NASDAQ traded positive on Friday, it still closed below the T line as a Doji-type day. This would allow for the prospects of the high-tech stocks still maintaining good short profitability. There are a good number of fry pan bottom patterns in the breakout mode.JBL is producing a scoop pattern set up, this would imply a positive open on Monday producing a strong bullish move.
The mining stocks, gold, and silver, copper, steel, and iron, are all producing strong bullish patterns.TRQ, TGB, KL, CLF, SA, KGC. Copper stocks, FCX, SCCO, COPX.
Regional airlines are producing good bullish patterns, AZUL, GOL, FWRD, CPA. The steady market uptrend allows for simple scanning to find the strong stocks and sectors. A great learning high-tech product is our mousepad with 12 major signals. Keep the graphics of candlestick signals at your fingertips. Click here to view our mousepad product.
Yesterday’s hammer signal at the 50 day moving average in the NASDAQ gave the prospects of the 50 day moving average going to act as support, with the next target at least a bounce back up to the T line, which is exactly where the NASDAQ is trading now. The other indexes are all showing good bullish uptrending charts. If the strength continues into the close today, obviously closing out short positions is logical. It will be important to see where the indexes close today.
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Stock Chat – Thursday 05/06/21
The Dow continues to trade higher, the NASDAQ is trading lower. This allows for simple candlestick scanning techniques to identify the strongest bullish charts as well as the strongest bearish charts. This allows for profiting in both long and short positions at the same time. The market is very sector-specific. The steel stocks, oil refining stocks, and mining stocks are producing good bullish trades. The high-tech/computer-related stocks have produced good short positions. The major advantage of candlestick analysis is being able to quickly identify which stock/sectors are moving in a specific direction. Currently, the NASDAQ has sold off to the first obvious support level, the 50 days moving average. This alerts the candlestick investor to watch more diligently to see if any buying starts coming in the short positions. Logically, buy signals would warrant taking profits in short positions and getting ready for bullish reversals.
Big profits can be made on bullish breakouts. When there is not any bearish sentiment in specific sectors of the market, any good news will stimulate stronger buying because of the lack of selling fears. This was illustrated in numerous stocks today,AVID, BCRX, HL that get exaggerated price moves because there is no bearish sentiment fears. Take advantage of the candlestick signal breakouts during these market conditions. Many strong price moves are identified early in the Candlestick Forum chat room. This provides a valuable source of getting into strong trades early when many eyes are looking for the same pattern breakouts following candlestick signals.
Chat session tonight at 8 PM ET. Click here to register.
Good investing,
The Candlestick Forum team
The market indexes divergence remains the same, the NASDAQ is trading lower but is showing the possibility of supporting at the 50 day moving average. It is currently doing a Doji day but the stochastics are still heading down. This would imply another day or two of hovering near the 50 day moving average until stochastics get into the oversold area. The strategy remains the same, short positions are working and long positions are working, have both in the portfolio.
The NASDAQ continues to trade lower while the Dow remains relatively flat. This has produced some excellent profits in short positions in the high tech area. The NASDAQ is currently hovering at the 50 day moving average. Mining stocks remain in good uptrends. The prognosis remains the same, have both long and short positions in the portfolio.
May 12th Daily Market Comments
Although the NASDAQ traded positive after it opened yesterday, it did not do a reversal signal. Obviously today’s strong selling indicates the NASDAQ remains in a downtrend as well as the other indexes coming off shooting star signals. The shorts are working very well. Any long positions require very compelling bullish charts to stay long.ie NMRD, ET.