Although the indexes pulled back Today, they produced indecisive candlestick formations, a Doji type day. Each of the indexes has created the double Doji setup. This is consolidation but indecisive selling, usually implying profit-taking. The double Doji set up allows investors to enter trades immediately upon a positive open, showing that the consolidation is over. A positive open will usually produce a candle formation of the same magnitude as the candle prior to the double Doji’s. A positive open tomorrow, even though NFLX missed their earnings, would indicate the T-line is still acting as a strong support level.
Although the market indexes have been choppy in the slow uptrend, simple candlestick scanning techniques have revealed the strong sectors. The Biotech and medical supply companies have been acting extremely well based upon the virus situation. Crude oil prices have maintained at the $40 level. This is produced some good strong bullish charts, such as MTDR, HAL and APA. Gold stocks have acted well also. Having the ability to identify the very strong bullish candlestick reversal signals has two major benefits. It shows which stock/sectors are going to move positive and inordinate strength that will be exhibited in those sectors. The strength of a Top Ranked signal or pattern is likely to maintain strength even during bearish short-term moves in the indexes.
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Good investing,
The Candlestick Forum team.
