Each time a candlestick sell signal has occurred at the top of the trend channel, the question becomes, "is this profit-taking pullback or a full-scale reversal?" This question becomes much easily answered when identifying what type of candlestick formations occur in the pullback and what candlestick formations occur at important technical support levels. For the past six months, the 20 day moving average has been an obvious support level for the Dow. Short-term traders have been able to successfully exploit the small market moves up off the 20 day moving average and back down to the 20 day moving average.

Each time the Dow moves back to the 20 day moving average, there is always the concern that this time the bears are taking control and the 20 day moving average may not act as support. That concern is greatly diminished when able to identify what type of investor sentiment is occurring at the support level. It becomes a very simple analytical process. Are the sellers demonstrating decisive strength going down through the support level or is the trading relatively indecisive? Witnessing Doji's, Spinning Tops, Hammer signals or bullish candlestick signals at those levels immediately reveals that what has acted as support many times in the past is once again showing indecision on the bears' part.

Being able to evaluate what the investor sentiment is doing by what the candlestick signals are revealing dramatically improves the short-term trader's perspective as well as the long-term investors' perspective. The signals reveal when a major reversal has occurred. They also reveal when a major reversal has not occurred. Click here for candlestick signals training CDs.

Kicker Signal

What is the most powerful candlestick signal? The Kicker signal! A simple dissection of how a Kicker signal is formed makes this high profit signal easy to understand. The Bullish Kicker signal is very simple to describe. After a downtrend, the last candle is a reasonably large dark candle. The following day, the price opens at or above the previous days open. This essentially is a gap up in price from the previous days close back up to the previous days open or higher. From that point, the price immediately moves in the opposite direction of the previous day's candle, creating a bullish candle. This dramatic change shows investor sentiment has been 'kicked' in the opposite direction. That dramatic change is usually caused by an announcement or an event that will have a strong new influence on the perspective future of that company or trading entity. There is a very high probability that the new investor sentiment will continue for a reasonable length of time.  Click here for the Kicker signal Training CD. 

The Candlestick Forum's recommendation of ABAX was based upon the dramatic change of investor sentiment. The strength of their earnings report 'kicked' the downward trend in the opposite direction. Not only did the price move in the opposite direction but it gapped up through the 20 and the 50 day moving averages, both had been acting as resistance for the past few months.

ABAX

The strength of the price move demonstrated that those resistance levels were not going act as resistance any more. A Kicker signal can be bought anywhere where there is evidence that the bulls are not leaving the trade. The bulls will be in this trade for a while. That is what the Kicker signal tells us.