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.
Chat session tonight at 8 PM ET. Click here to register.
Good investing,
The Candlestick Forum team
