Where do you grab for the falling knife? The candlestick signals that appeared in the market indexes last week, bullish Harami’s telling us the selling had stopped and the hammer signals also showing reversals, were confirmed with bullish trading today. The indexes came back up to the first logical target, the T line, as well as 50 day moving averages. The appearance of the bullish signals followed by bullish confirmation provided high probability that a bottom has been reached and the knee-jerk reaction of the Chinese trade wars has diminished. Numerous individual stock charts were also showing bullish reversal signals on very observable support levels. It is this visual information that produces entry levels at high probability levels.
The bullish left/right combo was evident in the TSLA chart. Add the prospects that everybody was buying at the 50 day moving average support level dramatically improves the probabilities that this was a strong buy. Knowing when the markets are showing a change of investor sentiment makes the probabilities of pattern breakouts, such as the scoop pattern identified in our recommendation on PTLA, greatly improving the prospects of not only having a bullish trade but a very profitable bullish trade. A scoop pattern breakout usually produces a high profit move. Identifying the reversals in the major market indexes allows for scanning and executing high profit individual candlestick signals.
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Good Investing,
The Candlestick Forum Team
