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Bargain Stocks

These days of market uncertainty may be a good time for traders to scout for bargain stocks. Euro Zone leaders are meeting in another attempt to come to agreement on the EU debt dilemma. A figured bandied about is 2 Trillion (about $2.6 Trillion in USD) needed to stabilize banks and shore up the national treasuries of countries like Greece, Italy, Spain, Portugal, and Ireland, the so called PIIGS group. When the news carries a story about a possible solution to this problem stocks surge and when a contradicting story follows, stock prices fall. As the world seeks, with varying degrees of success, to extricate itself from the worst recession in three quarters of a century both those interested in long term investing and in day trading are keeping an eye out for bargain stocks. Both fundamental and technical analysis are necessary in finding bargains in the stock market. Buy and hold investing works when an investor finds a stock with a strong intrinsic stock value and a good margin of safety. The investor uses technical analysis with Candlestick charts in order to keep in touch with market sentiment and buy stock at the lowest reasonable stock price.

Stock traders have a wider range of options that investors do when trading bargain stocks. When a low priced stock comes in with strong profits and gains the attention of the market its price often jumps accordingly. If stock market news comes out after trading hours the stock will often open substantially higher the next morning. Traders using Candlestick analysis who know how to anticipate, or trade after, a breakout gap can often obtain the majority of profits available from such a stock. Sometimes a popular stock disappoints the market despite strong earnings. For example, Apple failed to meet analyst earnings estimates for the first time in years despite a more than fifty percent increase in profits. Thus the market punished Apple with a fall in its stock price. Maybe the fact that the company co-founder has passed away has made investors question the ability of the company to come up with new and exciting gadgets. If Apple falls a bit more based on negative investor sentiment, instead of rising based on its strong fundamentals, it could also enter the world of bargain stocks.

In the stock market of today with so much attention on large US banks being sued for allegedly selling bad mortgages to Fanny Mae and Freddie Mac, bank stocks might fall in the category of bargain stocks. We are not suggesting that anyone engage in bank stock investing or avoid bank stocks but offer the situation as an example of how to find bargain stocks to trade or invest in. Traders following such stocks can use Candlestick patterns to assess market sentiment. Candlestick signals can help traders in commodities, futures, options trading, Forex, and stocks, trade equities that are mispriced due to market inefficiency. By learning the fundamentals of the stock in question and then reading easy and clear Candlestick signals traders can profit in up and down markets, especially in trading bargain stocks.

Market Direction:

As a speaker at the CSTA meeting in Toronto Canada this past weekend, with well-known names such as Ralph Accampora, Jake Bernstein, David Elliott as well as distinguished technical analysts from Europe and Asia, there was one underlying obvious factor. There are too many technical price movement indicators that occur on a reoccurring basis to think that prices have anything to do with underlying fundamentals. Whether analyzing the nature of cycles or oscillations in volume, it becomes much more obvious that prices and trends are created by reoccurring investor perceptions. It was also apparent that candlestick analysis is becoming a much more accepted analytical tool combined with other technical methods. The graphic depiction of price movement becomes much more clear when put into candlestick formations.

If you are sincere about understanding how price movements occur, candlestick analysis remains the purest form of graphic indicators that represent a change of investor sentiment. Numerous other technical analysis requires the assumption that specific technical levels are going to act as support or resistance. Simply stated, the study of trend lines, moving averages, cycles, or other trading methods using historic information are based upon what might occur at those levels. Candlestick analysis provides the investor with a huge benefit. The signal formations or pattern formations are the creation of investor sentiment right now! This is valuable information in its own right but dramatically improves probabilities of showing reversals of trends when applied to other technical areas that "might" act as a reversal area. The utilization of signals and patterns allow the investor to extrapolate what a trend should do with an extremely high probability.



It is late October and most of the country is experiencing cold and drizzly weather this coming weekend. That might appear dismal and dreary, but take heart. This is a perfect weekend to stay in front of the computer and learn everything about candlestick analysis from A to Z. It is not too late to sign up for a full day of candlestick analysis training. Steve Bigalow will be teaching how and why candlestick signals work effectively. His teaching method, a comprehensive chronological learning process allows an investor to understand a completely different perspective for investing. Once this learning process is put in place, the investment flaws caused by human emotion are greatly diminished. If you have often wondered who was buying your positions when you were panic selling at the bottom or who was selling you stock when you were exuberantly buying at the top, this training session will completely alter your investment perspectives. You will be buying at the bottom and selling at the top. If it's going to be cold and rainy, this is a perfect time to stay in your pajamas, fix a pot of hot coffee, and learn how to constantly pull profits from the markets.

Member Chat Session tonight at 8 PM ET.

Good Investing,


The Candlestick Forum Team


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