The simple visual analysis allows investors to identify when it’s appropriate for adding short positions to the portfolio. The indecisive trading in the indexes, in the overbought condition, dramatically increases the probabilities of short positions starting to work well. Strong bearish candlestick signals also pinpoint which stocks are going to be selling with the most force. That has been illustrated with bearish kicker signals and bearish best friends. Having the ability to analyze what the overall market trend is doing and then applying the strongest candlestick signals/patterns in that market environment dramatically improves the probabilities of being in the right trades at the right time.
The oil stocks have sold off as illustrated by the MorningStar signal in LPI. Maintaining that short position is merely applying the T-line rule. The visual aspects of candlestick charts also reveal where the targets are that everybody else will be watching. Bearish kicker signals as well as bearish best friend signals have been providing good strong short profits when the market direction has become indecisive. This step-by-step analysis dramatically improves the probabilities of being in profitable trades.
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Good investing,
The Candlestick Forum team
