New Intermed Uptrend!!

JAPANESE CANDLESTICKS REVERSAL PATTERNS(CONT.)

DARK CLOUD COVER

-This is again a dual candle pattern.
-Signifies a top reversal pattern.
-The first candle is a strong white real body.
-The second day's price opens above the previous session's high and then penetrates deep into the previous day's candle.
-Greater the penetration,greater the possibility ofa top.(better if can take out half of the previous day's white candle)
-The above pattern is something like the Bearish Engulfing Pattern,the only difference being that the Dark Cloud Cover takes out about half of the prior day's candle,while the engulfing pattern takes out the whole candle and more.

Again,from the trade perspective,this does not mean that we get all gung ho short......this acts as a warning,a possible turn around,a possible top.We then act on our sell signal,with a stop above the high of the Dark Cloud Cover Candle.

PIERCING PATTERN

-Counterpart to the Dark Cloud Cover.
-signifies a possible bottom.
-Here we have a dual candle pattern,the first a wide range bearish candle followed by a white candle that starts lower than the low of the previous candle and rallies to more than 50% of the previous bearish candle.
-This is bullish.....a signal of tiring bears and stronger bulls.Yet we do not act on this alone.......we still do our pivot analysis,our indicators,trendlines,etc

MORNING STAR

-This is a three candle pattern.
-Candle1=We have wide range bearish candle.Bears are in command.
-Candle 2=Here there is a small real body which does not touch the real body of the previous candle.Tiring Bears......an inability to drive the stock down more.
-Candle 3=Bullish candle that pierces into the first candle's body.Bulls in control.
-Signal of a possible bottom as bulls seize the initiative.

EVENING STAR

-Counterpart to the morning Star.
-sign of possible top reversal.
-again 3 candle pattern
-Candle 1=Wide range bullish candle.Bulls in command.
-Candle2=Small real body that does not touch the real body of the previous candle.Tiring Bulls......as they show an inability to drive prices higher.
-Candle 3=Bearish candle that pierces into the body of the first candle.Bears seize the initiative from the bulls driving prices lower.

SPINNING TOP/DOJI

-Spinning tops have long upper shadows and long lower shadows and very little real body.
-Can occur after an uptrend or a downtrend.
-signify potential reversal.
-Dojis have long upper and lower shadows and no real body(i.e the open and close is at the same price).
-they signify potential reversal like the spinning tops.

Happy Trading!!
Saint

Attached Images

	dark cloud cover.gif (3.5 KB, 18 views)
	morning star.gif (3.4 KB, 16 views)
	evening star.gif (3.5 KB, 15 views)
	spinning top.gif (1.6 KB, 16 views)
	doji.gif (1.6 KB, 16 views)

Hi Anupama/SSM,


Thanks as always for your kind words!

Saint

Hi SSM,
Not symmetrical as rightly pointed out.........in h&s pattern,the 2 shoulders need not be exactly the same height,sometimes we can have 2 left shoulders and then a head,and then 2 right shoulders.....sometimes you could get 2 heads.All of these are called complex h&s patterns.

The beauty of 2 left shoulders is that we can safely expect 2 right shoulders before the fall............

In Karnataka Bank,we have a left shoulder made on huge volume,then the head made in much lesser volume and then followed by a weakish right shoulder made on very little comparative volumes.The neckline is sloping upwards in this case.That bearish move down on the 22nd last week looks like a confirmation move down breaking the neckline,and now we have a return move up.

Breaking of the 108 area confirms more bearishness as this stock corrects on longer term charts.

From trade angle,if you are a bit of an aggressive sort,short with a stop at 118.But if it makes a strong move and takes out the 118 levels,then take your stops.Add more once the 108 levels are taken out.Target(first)=96.

Wrong place actually for this post........talkng of shorts in a Post on Uptrends.

Happy Trading!
Saint

Hello Saint!

Hope you had a nice weekend...
Thanks for taking time and sharing your knowledge with us.

Regards

Roneeth

>

Hi Saint
Thanx as always. The pattern is important not the end outcome, I suppose
Also share some more reversal, consolidation patterns when time permits. Wanted to apply my newly acquired theory to some practical situations
Regards

Saint, a small request. What TA is saying for Platinum Parekh. Will it bounce back. Its CMP is 10.70

thanks
xtiger

Hi Saint,
Thanks for your new and educative posts on candlesticks.
I really like the idea of attaching the diagrams therewith for our quick reference,
Congrats for your 1000th posts as well...all the best
Madhura

Hi Saint,

Anything we can BUY in the current market for long term investment?

Regards,
Narendra

Hi Saint,

All the posts spent in asking you questions........to say Senior member .Maybe Traderji should make it above 500 or something like that.

Thanks again for your teaching!

Avinash

Hi xtiger,

PAREKH PLAT:Experienced a downtrend from 2000 and bottomed around Sept 2001,and from then till now it has been in a sideways trading range.A close over 19 on the weekly signals the possibility of an uptrend.........As of now it's nothing but a sideways range that could take forever to break out.Stay away for now.....buying here could give you the satisfaction of buying at the bottom.Would also give you the frustration of your money taking forever to grow.

Happy Trading!!
Saint