Value stock investing is the term that most fundamental research analysts include in their analytical description. What is value stock investing? The search for those companies that have good earnings growth/management/market potential. What is the strongest selling point for money managers? That they are adept with their value stock investing experience in finding the best growth company potential's. What is the risk for most of value stock investing programs? That the analysis of the company's future is correct.

Consider the elements involved with value stock investing. First, companies need to be found that have a product or a service that will be marketed/excepted into a market with success. How are these companies found for a value stock investing program? That requires the analysis of what the future will produce in specific markets. Secondly, what is the potential growth of the product/service into a market? This is the area that makes value stock investing the most difficult. More difficult in today's markets than just a few years ago. Value stock investing has become much more difficult to anticipate what will happen in the distant future due to all the advances that are turning in technology. What might be a viable market condition today may not be the same in six months from now or a year from now.

The advantage the candlestick analysis provides for value stock investing is that it pinpoints what investor sentiment is perceiving of a stock/sector right now. A breakout or a strong price move from a lethargic trading range becomes an alert that some new dynamic or perception is involved with that company/sector. This makes value stock investing much easier to implement. The candlestick signals illustrate a change of investor sentiment. They also can illustrate a dramatic change of investor sentiment. If a signal is produced from a stock price trading range that has not shown any great movement for extended period of time, and moves out of that range with dramatic force, the formation of the candlestick signal can alert the value stock investing community of something new occurring in the perception of that company right now!

With technology advances occurring constantly, there will be tremendous changes in the products available on the markets for stock market strategies. The advances of technology can completely alter the potential growth future of an industry. A prime example is video rental of industry. Not too many years ago, Blockbuster and Movie Gallery were the Golden Childs of the stock markets. Online video rental has now completely changed the perspective of those companies and even possibly the existence of those companies.

One of the member services on the candlestick forum is to identify companies that have created dramatic changes in an industry. These companies are found by  visible candlestick breakout signals. The combination of technical analysis ( candlestick breakout signals ) and fundamental research can produce very powerful profits in the coming markets. The candlestick signals can demonstrate when it is time to buy. Upon see in a strong breakout signal, researching the reason for that breakout will help to immediately identify a company that has produced something that will make it a major investment potential. Using the candlestick signals to identify a dramatic change of investor sentiment and then following up with research on what made that change of investor sentiment becomes a very powerful combination.

IFO Chart

All  investor  are looking for stock positions that can double, triple, or quadruple in a very short period of time. Candlestick signals used correctly provides a format for identifying those possible situations at the beginning of the price move.

Market direction - last week the Dow came up through what would have been perceived as a resistance level. It has since shown some toppy signals. The doji was followed by a bearish day. It signified bearishness in the fact that it had moved higher and then closed at the lower end of the trading range. This became a clear example of the Bulls finally being pushed back down. Many investors make the mistake of thinking that the next day was a clear indication that the Bulls were still in control. Note the candlestick signal that  formed. A Bullish Engulfing signal. However, as found in the candlestick forum's training CD on Bullish Engulfing signals, a Bullish Engulfing signal in overbought condition is a significant signal. It usually represents the last gasp buying of the uptrend. What does the training CD information reveal about a bullish engulfing signal in an overbought condition? It explains why this formation shoul alert an investor to start watching for candlestick sell signals.

As seen in yesterday's price action in the Dow, the Bullish Engulfing signal should keep investors from buying aggressively.

(DOW chart)

The NASDAQ can plainly be seen to be trading in a sideways channel. The bounce off the 50 day moving average was not confirmed today. Having the knowledge of what the Bullish Engulfing signal represents when analyzing the Dow, makes anticipating what should be happening in the markets the following day. A bounce off the 50 day moving average in the NASDAQ should have been followed by more bullish activity. The same was true with the Dow. The fact that the markets opened and started to move lower was the expected confirmation that the Bullish Engulfing signal was the last gasp buying. These are very simple visual observations provided by candlestick signals. Having the knowledge conveyed from candlestick analysis allows investors to make decisions with much more clarity as to what the market direction is doing.

The evaluation of both indexes provide a picture that indications some pull back in the DOW and some sideways movement in the NAS. This would warrant watching more for sector rotation than a full fledged sell off

Website special - Mr. Bigalow has been speaking in front of many of the investment groups around the nation in the past few weeks. There has been one obvious feedback result. Using candlesticks signals in easy-to-recognize patterns makes it very easy to establish potentially profitable trades and very easy to recognize when to get out of the trade. Using gaps and moving averages dramatically increase the probabilities of being in a correct trade. Understanding what should occur in a J-hook pattern, the scoop pattern, the fry pan bottom, the belt-hold and the cradle pattern creates a trading process that permits an investor to take advantage of big-profit moves while at the same time dramatically limiting losses. Most investment professionals sagely advise to cut your losses short and let your profits run. But have you ever had an investment professional explain how they do that? The candlestick signals and patterns provide a very clear format for doing just that. Take advantage of the knowledge found in these training CDs. If you want to gain advantage of being in the right positions at the right time, do not miss the opportunity to obtain an immense amount of knowledge put on eight highly informational investment training CDs. You will use this information for the rest of your life.

You do not have to learn complicated formulas. After viewing each training CD, the knowledge you obtain well visually recognizing high profit patterns will become ingrained in your visual memory. Wouldn't you like to be able to project what a price move will do with an extremely high degree of accuracy? That is what the Advanced Pattern Analysis Package provides. The knowledge gained from these training CDs will provide profits for the rest of your investment career. Click here for the Advanced Pattern Analysis Package details. This price special will be over at the end of this weekend. Order now and save money.

Analyzing candlestick charts becomes extremely easy when knowing what to look for. Learning the stock market is a very difficult endeavor when not instructed on how to control emotional investing. The candlestick signals provide an application that dramatically reduces emotional decisions. Learn how to invest correctly. Teach your kids how to invest correctly. The common sense investment principles found in candlestick signals easily teaches investors what the professional investors are doing.

Chat session will be at 8 p.m. tonight. Mr. Bigalow will be giving a free presentation to the West Palm Beach TC net club on Saturday morning March 25, 2006 starting at nine o'clock a.m. and going to 12 noon. Come join us if you're in the area.

Good investing,

The Candlestick Forum staff

Newsletter - Value stock investing complemented by candlestick signals - March 23, 2006

Click here for Previous Newsletter - Techn ical Analysis Sites Complementing Candlestick Analysis