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January 24th Market Wrap-Up

The market trend analysis is relatively easy when utilizing the graphics of candlestick charts. Today the NASDAQ traded higher while the Dow traded lower. Simple logic indicates the lack of any direction of investor sentiment. But this lack of sentiment pushing the market up or down makes the relevance of candlestick charts that much greater. Simple candlestick scanning techniques illustrates which stocks/sectors are being bought or being sold. The analysis of individual stock charts reveals what is actually occurring in investor sentiment pertaining to that stock without the influence of the overall market moving the stock price one way or the other. The lack of market trend pressure allows candlestick patterns to work that much more effectively based upon their own merits.

Numerous J-hook patterns are being illustrated in these market conditions. Knowing the expected results of specific candlestick signals and patterns provides two major benefits. First, it demonstrates the direction of a price move with a high degree of accuracy. Secondly, knowing the results of a pattern produces much stronger profitability during an uptrend than merely an uptrending stock during an uptrend. Candlestick analysis allows an investor to identify which price movements are going to be the most profitable. On a day like today, where there is no major direction of the general market, it is not unusual to have a great majority of the positions in the portfolio moving in the correct direction. That includes both bullish and bearish positions. That factor is merely based upon identifying which patterns are going to produce good bullish profits as well as which patterns are going to produce good bearish profits, both occurring when the market is not influencing a major trend.

 

 

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Good Investing,

The Candlestick Forum Team

 


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