Fundamental and technical analysis is greatly enhanced when using candlestick signals
Fundamental and technical analysis can work in conjunction for finding the best possible trades. The combination of fundamental and technical analysis provides a very viable universe of high quality trades when applying candlestick signals. Consider the advantages that occur when both fundamental and technical analysis is utilized for investment decisions. What should be the best universe of stocks? Those stocks that have a fundamentally sound background. There are analysts out there that discover and recognize fundamentally strong companies. Unfortunately, they feel that buying and holding is the best investment strategy. The rationale being that a fundamentally sound company will eventually be discovered by the rest of the market. That usually means their timing stinks.Candlestick signals have a very viable benefit to the combination of fundamental and technical analysis. If a universe of stocks is developed with the criteria being that they are fundamentally strong companies, this greatly reduces the probabilities of being surprised with bad financial numbers. However, being in a fundamentally sound/strong company does not necessarily mean a stock price is going to appreciate. What makes prices move up or down? The perception of what the fundamentals can do is what makes prices move. Utilizing candlestick signals is a very strong benefit for investing in fundamentally sound companies. The signals illustrate when investors are getting into and out of stock positions. Fundamental and technical analysis should be exploited to its fullest potential. Analyzing the universe of fundamentally sound companies with candlestick signals allows an investor to time their positioning in strong companies. Theoretically, all sound/strong fundamentally run companies should go up. Reality proves differently, as seen in the late 1990s, money did not flow into the fundamentally sound companies. Massive amount of funds flowed into companies that had no fundamentals at all. When is it time to buy a stock? It is when the markets perceive that it is time to be in that stock/sector. The candlestick signals clearly illustrate when funds flow from one sector to another. Utilizing the information conveyed from the candlestick charts can produce a very strong trading strategy when trying to time the purchase of stocks that have good management/earnings growth. Investor sentiment can be easily recognized when interest starts coming into a stock position. The signals and the patterns found in investor sentiment will always be the same. The ability to recognize candlestick signals within these patterns dramatically improves an investor’s probability for making profits. The Candlestick Forum has packaged the high profit patterns into a special price package. The visual analysis, when utilizing these signals, is very simple. High profit trades become easily recognized, especially when candlestick signals reveal the potency of a pattern. Click here for details on the Advanced Pattern Analysis Package.Option trading - Once the patterns and signals reveal a high potential trade, being able to maximize the profits from that trade, is the next logical step. Options strategies become the logical process for extracting very large profits. Knowing what option strategy to implement for the time and magnitude that a price move can potentially fulfill requires the understanding of profitable option strategies. Learning the correct option techniques greatly enhances an investor’s ability to exploit profits from a strong candlestick signal while at the same time minimizing risk exposure. Options University provides an excellent training program for implementing options strategies. The minimum time and effort that it takes to become educated from the Options University training program allows an investor to extract large profits from the markets. Combining the knowledge of candlestick analysis with the insightful knowledge conveyed by Option University puts investors in the position of controlling their own high profit strategies for the rest of their lives.
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Market direction – The strength exhibited in the markets on Friday made it more obvious that the probes toward the 50 day moving average this past week in the Dow was the bottom. The Dow now appears posed to test the recent highs. If the Dow gets back up toward the 11,150 range, watch to see which candlestick signals appear. A bullish candle, breaking out through that level will be needed to indicate that the uptrend is still in effect. Conversely, seeing some weakness at that level, doji's, spinning tops, or shooting star type signals would reveal a double top failure. As of now, there should be at least a few more days of uptrend in the Dow
The reversal in the NASDAQ, the Bullish Harami which told us that the selling had stopped, was followed by confirmation buying on Monday. The NASDAQ appears to be still in a consolidation stage. Any upside movement from here will probably be slow. However a slow uptrend in the markets makes the candlestick signals that much more effective.
The stocks that are trending up off a strong buy signals continue to do so as long as the market sentiment does not change dramatically. This can be better illustrated in the stock charts such as AZPN.
The recommendation for this purchase was based upon the Kicker Signal off the 50 day moving average. The strength of that Kicker Signal can continue its uptrend provided the market sentiment in general does not have any severe change. Even though the market traded relatively flat during the past couple of months, investor sentiment after the Kicker Signal could continue it is upward trend. Had there been a severe market reversal in general, the uptrend in this position may have been ended. Candlestick patterns make analyzing the overall market trends easy
Mr. Bigalow will be speaking in Denver, Dallas, and West Palm Beach before the end of the month. Please see the speaking schedule for times and addresses.
Thursday night chat session is scheduled for 8PM Eastern Time.
The Candlestick Forum staff
Newsletter - Fundamental and technical analysis using candlestick signals - March 13, 2006
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