A reversal in the market indexes become much more easier to identify when using the Doji candlestick signal. The Doji candlestick signal is the most recognized signal. It illustrates indecision between the bulls and the bears. Today’s selling was identified when the Dow was trading back below the open of Friday. This is more relevant when the indexes are in the overbought condition. Additional confirmation was a gap down from Doji’s of Friday in both the NASDAQ and the S&P 500. That creates a bearish best friend signal, one of your strongest trend indicators. The additional bearish confirmation was the closures below the T line. The Doji candlestick signal can identify which individual stock positions are going to show the strongest potential down moves. Simple logic – if you can analyze the overall direction of the market based upon candlestick signals, you can identify which down trending stocks are going to have the strongest bearish potential using candlestick signals.
