The Dow formed a bearish left/right combo on Thursday with a close below the T-line. This was a strong indication that there would be some consolidation/selling, likely to come back and test the 50 day moving average. Today’s trading illustrated the fact that the 50 day moving average appeared to be acting as a support. This did not necessarily mean the downtrend is over, it provides an analysis that might illustrate a slow drifting market trend if the market indexes have a hard time getting back up through the T line. It will be important to see how the markets open tomorrow. A strong bullish day would clearly indicate that most investors the 50 day moving average was going to be a support level. This usually provides bullish confidence, capable of starting another strong uptrend. Today’s bullish trading in the Dow could be considered a piercing signal that used the 50 day moving average as support.
The biotech stocks continue to show very strong up-trends. The medical supply stocks also are showing good strength. Note how APT broke out of a wedge formation on good strength today. This dramatically improves the probabilities of an uptrend starting and a strong uptrend in progress. Having the ability to identify what type of signals or patterns are breaking out through resistance levels provides the candlestick investor with a greater insight into which stock moves are going to have the strongest upside potential. Maintaining long positions during the sideways/drifting market is based on a simple trend factor. As long as the up-trends remain above the T line, the uptrend will remain in progress. Join us this weekend for the two day comprehensive training on candlestick analysis. The multitude of chart analysis produces a completely different and profitable perspective for investors. You will gain valuable insights as to what really moves prices. Click here for more info.
Chat session tonight at 8 PM ET with Kent Savage. Click here to register.
Good investing,
The Candlestick Forum team.
