Today’s trading provided more evidence of the choppy nature of the overall market trend. The Dow closed below the T-line. However, the NASDAQ, the S&P 500, and the transportation index all trading back up and closed above the T-line. This provides the candlestick investor with the evaluation that there are currently strong sectors in this market trend as well as weak sectors. The benefit of candlestick analysis is that simple scanning techniques allow for identifying which of those sectors are acting strong and which are acting week. This provides the opportunity to be profiting from both long and short positions in the portfolio.
Currently, biotech’s have been producing very good profitability over the past few weeks. The pot stocks are starting to show good bullish chart patterns. At the same time, clothing stocks are starting to show good bearish patterns. Evaluating the signals and patterns allow an investor to see which strong sectors are starting to take profits, i.e. the electric vehicle sector, and which sectors canal be rolled into because of strength. The graphics of candlesticks are merely the identification of where investor sentiment is moving to and moving from. Using the simple graphics from candlestick analysis allows investors to have an extremely high probability of being in long or short in the appropriate sectors. Additionally, when identifying the strong sectors, each sector can be broken down into individual stocks to identify which of those stocks are producing the best bullish signals and patterns. This is what puts the probabilities consistently in a candlestick investor’s favor.
Chat session tonight at 8 PM ET, identifying the best sectors.
Good investing,
The Candlestick Forum team
