February 20th Market Direction
The shooting stars that formed in the indexes on Friday provided good evidence of profit-taking on weakness today. The Dow and S&P 500 sold off to the T line, making the prospects of a bobble set up viable. However, if the T line does not hold, the blue ice failure pattern will make the 200 day moving average the next likely target. It will be very important to see if the T line holds as support tomorrow. The shooting star/Doji pattern was evident in a number of the big trading stocks i.e. AAPL, NFLX,TSLA. The candlestick signals provide very accurate market trend assessment. The potential reversal of the current trend alerts the candlestick investor to be prepared to take profits and be ready to add some short positions back to the portfolio.
Although the majority of stocks will move in the direction of the market, candlestick breakout patterns continue to produce opportunities for a strong price trend in individual stocks, in spite of the fact the market in general is not showing any great strength. Today's recommendation on ROKU was based upon a high probability pattern breakout, the bobble breakout.
It formed a Doji sandwich at the breakout level which revealed two important factors. First, the 50 day moving average resistance level was not going to act as resistance anymore and secondly, there would be more upside based upon historic results of a Doji sandwich. Knowing the simple results of candlestick patterns and signals allows investors to take advantage of high probability trade results.
We will conduct a "Members Only" chat session tonight at 8:00 pm EST.
The Candlestick Forum Team
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