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February 26th Market Direction

Today's positive trading was already indicated by the positive trading on Friday, creating a bobble breakout pattern at the 50 day moving average. Candlestick investors have a great advantage when being able to identify pattern setups that produce high probability results. The bobble pattern has an extremely high probability factor. It is a J-hook pattern that initially resists at an obvious resistance level, the 50 day moving average, and pulles back back to an obvious support level, the T line. When the next bullish move breaks through the resistance level, the 50 day moving average, it is merely a J-hook pattern with much more obvious selling and buying points. This allows the candlestick investor to be buying aggressively when seeing a high probability pattern setting up.

Being able to identify which direction the overall market trend is moving is merely the initial step for successful investing. The same pattern setups can be applied to individual stocks. WATT produced a breakout of a wedge/frypan bottom formation on Friday. It was recommended today based upon high probability expected results. Although it did not trade excessively positive on the day, it created a high probability trade set up. A positive open tomorrow would create a Doji sandwich breakout. The magnitude of the price movement tomorrow would be the same as the price movement on Friday, thus the Doji sandwich in between. The prospects of being in the correct trades at the correct time is a function of candlestick signals be in the graphic depiction of what investor sentiment does to price movements time after time.


We will conduct a "Members Only" chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team

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