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.
