Santa Claus rally? The benefit of candlestick analysis is having the ability to see what investor sentiment is actually doing. This current rally, the Santa Claus rally as everybody has anticipated, is visually confirmed with candlestick analysis. Although generally assumed price moves are given names, they don’t always perform as expected. The visuals of candlestick charts allow for identifying what investor sentiment is actually doing. The confirmation of a bullish uptrend after bullish signals appeared in the indexes and then have maintained the uptrend by staying above the T line provides much more confirmation for the candlestick investor. The probabilities of a trend are greatly enhanced when using candlestick signals and patterns in conjunction with confirming indicators. Currently, as long as the indexes remain above the T line without experiencing candlestick sell signals, the high probability assumption is that the uptrend remains in progress.
Japanese rice traders observations are incorporated into candlestick patterns. You do not have to be a sophisticated analyst. The premise of candlestick charts is that they reveal the decisions resulting from everybody else’s analysis. This works both in bullish sentiment as illustrated in the BVDA and AAPL charts as well as bearish sentiment illustrated in the NVAX chart. Recognizing candlestick signals and patterns is based upon what human nature is likely to create as a price trend based upon the reoccurring aspects of investor sentiment. Having the ability to analyze the overall market trend allows for common sense trading, establishing positions with strong signals and patterns that correlate with the overall market trend greatly improves the probabilities of being in profitable trades.
Good investing,
The Candlestick Forum Team
