Today’s weakness in the Dow reveals the sideways mode of the market after it resisted at the 200-day moving average. However, the NASDAQ continues to trade higher. This combination indicates there is no major change of the overall market trend, merely shifting of funds from sectors to sectors. Big profits are being made utilizing the pattern breakouts. The slow curve breakout of ALT produced a 52% gain in the stock and with much greater returns in the calls. This is not to brag about being in a big price move trade, it is basically illustrating how utilizing the information built into candlestick patterns allows investors to be in the correct trade right at the ultimate entry points.
Utilizing the patterns provided by candlestick charts allows an investor to identify the exact time to get into a trade, not having to wait around to see if that trade was going to work or not. Identifying the breakouts instigates adding a position right at the appropriate time. Numerous stocks have broken out of patterns this past week, producing excellent profitable trades. Adding the T-line as an indicator creates a trading strategy that takes the emotions out of when to close out a trade. A bullish price move can be maintained as long as there is not a close back below the T-line. These market conditions enhance the prospects of big bullish price moves when there is a lack of concern of bearish sentiment possibly reversing the markets. Currently, with the market trend more of a sideways mode, identifying bullish candlestick pattern breakouts are further enhanced.
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Good investing,
The Candlestick Forum team.
