A Doji in the oversold condition, a good distance away from the T-line, is a high probability reversal signal on positive trading the next day. That is currently what is occurring. However, bullish confirmation still requires a strong candlestick formation today, a close near the top end of the trading range. Week signals, closing at the lower end of the trading range, produces the potential of a sideways consolidation for the next few days, waiting for the T line to come down closer to the trading range. Downtrend in stocks, especially the biotech’s, require confirmed reversal signals before covering short positions.
January 12th Daily Market Comments
A Doji in the oversold condition, a good distance away from the T-line, is a high probability reversal signal on positive trading the next day. That is currently what is occurring. However, bullish confirmation still requires a strong candlestick formation today, a close near the top end of the trading range. Week signals, closing at the lower end of the trading range, produces the potential of a sideways consolidation for the next few days, waiting for the T line to come down closer to the trading range. Downtrend in stocks, especially the biotech’s, require confirmed reversal signals before covering short positions.