Profitable Technical Analysis With Candlestick Chart Formation.

Candlestick signals present an easy and profitable visual technical analysis process. Chart formations allow an investor to evaluate when it is time to buy, time to hold, and time to sell. Most technical analysis programs provide areas of possible reversals. Candlestick chart formations produce immediate information. It allows a Candlestick investor to interpret the results of investor sentiment at crucial potential reversal levels.

The purpose of technical analysis is to provide scenarios for an investor to anticipate a high probability trade situation. The information incorporated into Candlestick signals makes evaluating chart formations a highly informational process. That information can be applied to identifying when to hold through pullbacks in a trend.

Netease.com Inc. is an excellent example of how to use Candlestick technical analysis effectively. The use of Candlestick chart formations produced the analysis that provided high profit trade. The Morning Star signal created the initial buy. The chart formation was additionally confirmed with the signal forming right on the 50 day moving average. The obvious resistance level, at the $60 area, becomes the next point of analysis. The analysis becomes simplified with Candlestick signals. Had the price showed a confirmed Candlestick sell signal at that resistance level, it would have been obvious that the sellers were once again at that level. It was time to take profits.

Netease Inc.

A breach of that resistance level would have indicated that a new dynamic had come into the price of the stock. If and when that occurred, technical analysis would have projected that the price would move to the past high level. The chart formations indicated that a peak had occurred in October of 2003 at the $71 area. That becomes a new target.

The fact that the price gapped up through the $71 area now requires new Candlestick technical analysis. As illustrated in the Candlestick Forum's “Gaps at the Bottom” and “Gaps at the Top” training CDs, the information provided by the gap up in price becomes a valuable analytical tool. The gap-up demonstrates a dramatically strong element in investor sentiment. Being able to evaluate how the gap will affect future trading allows for extracting additional profits out of the markets.

Trading above a gap level, a gap level that breached one or more major technical levels, has new implications. This high profit pattern can be exploited profitably. Notice after some initial profit-taking after the gap up, the Candlestick signals, a Spinning Top and a Doji, illustrated that investor sentiment was indecisive when prices came back to the level of the price when it gapped up. This information becomes relevant for projecting whether the price is going to come back and fill part of the gap or support at the top of the gap.

The evaluation can be made correctly after the appearance of Candlestick signals. Having the knowledge of what is likely to occur after a Spinning Top and/or a Doji chart formation makes for an easy analysis for the Candlestick investor.

Market Direction - As mentioned in the Members' morning comments, the direction of the market is still in a period of a slow bottoming process. Bullish trading on Thursday was again an indication that there was no strong selling pressure, although the stochastics revealed that there was still more downside direction in the NASDAQ, S&P 500 and the Russell 2000. The Dell report on Friday clearly snuffed out the potential of a strong market uptrend.

The Dow

What was needed in the Dow chart to indicate a good uptrend? Trading well above an obvious resistance level that had formed over the past couple of weeks. The NASDAQ chart had formed two Bullish Harami's over the past four trading days. Bullish trading, breaking the Dow above the resistance level and the Bullish Harami being confirmed in the NASDAQ, would have overridden the fact that the stochastics had not reached the oversold condition.

However, the weakness demonstrated in the market on Friday confirmed one analytical element. The markets will probably not turn back up until the stochastics do get into the oversold condition. As seen on Friday, the Dow sold off but is still in the middle of its congestion area of the past few weeks. The NASDAQ opened at the lower end of the previous day's bullish candle but formed a Hammer signal. The Hammer signal indicated that although the NASDAQ was down on Friday, it was not a severe sell-off.

The NASDAQ

The technical analysis of these chart formations should produce the scenario that the markets may continue to trade weak for a few more days but that the weakness should be mild. The anticipation, at this point, is that once the stochastics show oversold conditions, the next uptrend may get started.

Crude Oil prices have gone straight up ever since the price has started to make new highs. The strength may be the last hurrah. Watch for a sell signal to form in Crude Oil prices. When that occurs, the equity markets should pick up strength.

The use of Candlestick analysis is simple enough for anybody to use. This is not intricate technical analysis. The development of Candlestick signals was created by simple observations made by Japanese Rice traders for hundreds of years. No calculations, no deep rooted psychological evaluation, no complicated formulas! Just simple common sense applied to chart formations. Use this information to your advantage. It has worked for centuries and it will work for you if you learn how to use it correctly.

Free Training Session - Steve Bigalow will be providing a free training session on Saturday, August 20th, 2005 in Los Angeles, California. This will be a half-day session. Everybody is invited.

Free Training Session Information

Private Training Sessions – The analysis of what one market can do to another is easily evaluated when using Candlestick signals. The process for projecting market direction becomes relatively easy when a Candlestick investor can utilize the signals to evaluate all the markets that might be affecting the stock market. The better one can analyze the market direction, the much greater the profit potential.

Steve Bigalow spends a good amount of time during his two-day private training sessions demonstrating how to use the Candlestick signals to accurately evaluate market trends. Adding this information to the identification of high profit signal patterns allows an investor to control the profitability of their portfolio for the rest of their investment career. Don't miss the opportunity to gain some valuable knowledge first hand. The Candlestick signals produce an immense amount of analytical information. Whether trading stocks, commodities, Forex, or tulip bulbs, Candlestick analysis will dramatically improve your profitability. This information is taught in a very easy-to-understand manner. Sign up now for the August 27th and 28th training session or reserve a seat in the September class.

If you want to become the master of your investment future, this is an opportunity you should not pass up. If you would like more information, please contact us by email. To contact us by phone, please dial our toll free number: 1-866-251-4015. Contact us now, spaces are filling up fast.

Private Training Lesson Plan

Monday Night 'Members Only' Chat Session – The 'Members Only' chat scheduled for Monday night, August 15th, will illustrate some very interesting high profit trade scenarios.

Also, some of the members have requested that Mr. Bigalow demonstrate the process for scanning for those high profit trades. Members, see you Monday night at 8:00 p.m. Eastern time. Put your thinking caps on and let's get down to business!

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Chat Room Set-Up Instructions

The response to the 12 major signals CD training program has been astounding. There has been strong feedback that the in-depth analysis of each major signal is done in a clear and concise manner. The learning process becomes very easy when all the elements of what makes for a strong successful reversal signal to work correctly is explained by Stephen W. Bigalow. Each 45-minute training session not only explains what indicators confirm the effectiveness of each of the major signals, but it goes into the investor psychology that was present that made each signal occur. Understanding the psychology of investors when a reversal is occurring is a tremendous insight into what makes prices move.

A New Twist to an Old Favorite!

DVDs of the 12 Major Candlestick Signals - For those of you that would like to thoroughly analyze the 12 major signals, the signals that will perform more reversal patterns prospects than most investors will be able to utilize, the eight hours of concise analysis for each signal is now on DVD's. For the investor who likes to get comfortable in front of their TV screen, this DVD set will provide the opportunity to relax and learn at the same time.

Over $509 of valuable Candlestick signal education, for identifying the most powerful Candlestick reversal signals, is now priced at:

$397.77

Do not delay, gain the understanding of how prices move. This is information that you will be able to use for the rest of your life. The profits that this information provides can be made in your account month after month after month.

Click Here for the 12-Video DVD Major Signals Newsletter Special

You should never be put in a position where you do not understand why trades are being made for your account. Whether those positions are being put on in your managed account, or a hedge fund, or your own personal trading, you should have a full understanding of whether those funds are being put in the right positions at the right time. The Candlestick signals applied with Candlestick analysis will become the education process for understanding how to maximize your potential returns in your own trading or being able to analyze whether a money manager has any concept of correctly timing the markets.

Good Investing!

- The Candlestick Forum Staff

www. candlestickforum.com