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Candlestick Trading Forum

April 19th Market Wrap-Up

What is expected in a price move when it comes up through a resistance level? A high probability that it will come back and tested the resistance level to see if it's going to act as a support. Candlestick formations allow for an immediate verification that is what has occurred. Note in the Dow trading today, the pullback to the 50 day moving average and the T-line area was followed by buying. This was a good indication based upon the indecisive candle formation to assume today's trading in the markets was merely profit-taking versus any reversal in the market trend. Being able to assess the nature of trading during any time frame, such as witnessing a Doji day in the markets today versus a hard bearish candle trading day allows the candlestick investor to take advantage of the next price move or add to the existing trend movements. This is a valuable aid for keeping from being whipsawed in and out of positions.

Candlestick charts allow for a much more accurate evaluation of the overall market trend. It also allows for taking advantage of pattern breakouts that are not going to be affected because the overall market trend is continuing. Our recommendation on CRZO was based upon a high probability breakout pattern, the bobble pattern. When it broke through the resistance level of the 200 day moving average, especially with a powerful bullish signal, the best friend signal, it provided an extremely high probability profitable trade set up. The analysis of the markets in general as well as individual stock prices can be done very quickly based upon the visual aspects of candlestick charts.

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Good Investing,

The Candlestick Forum Team


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