Candlestick signals are created as a graphic depiction of what is occurring in investor sentiment. Candlestick patterns are the accumulation of investor sentiment illustrated in a recognized pattern that is reoccurring time after time. A major benefit of candlestick patterns is that it keeps an investor from getting whipsawed during oscillating markets. The frypan bottom patterns have produced inordinately strong and consistent profits. As witnessed, numerous fry pan bottom patterns continue to trade higher or flat even in a market that had sold off over 700 points. This is because investor sentiment was building up for other reasons in purchasing those positions, which was not concerned about the general market direction.
The Best Friend signal illustrates a new and powerful interest in a price move. This is illustrated from the Best Friend signal recommendation last week in ALT. Today it continued its uptrend based upon news that somebody had accumulated 20% of their stock. After a strong price move into the close today, the announcement has caused more buying in after-hours, up another 15 to 20%. This is not to illustrate great stock-picking ability, this is to demonstrate that the signals will illustrate when something very bullish is occurring in a price move. We may not know what is causing it, all we can analyze with candlestick analysis is that there is strong bullish activity. These are the positions we want to be participating in.
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Good investing,
The Candlestick Forum team.
