Wednesday, February 25, 2009

Japanese candles, and resistance levels

To confirm the levels of resistance can be used separate candles and candle patterns. This may be a new level of resistance after prolonged or improve existing levels of resistance, confirmed in a commercial range. In the commercial range of candles can help determine the entry point to sell or buy some resistance near the support. Below is a list of some but not all candles and candle patterns that can be used to identify or confirm the levels of resistance. Bear turning the model are marked (R).

"Medvezhye uptake (R)
"Bear" harami "(R)
"The smoke of dark clouds" (R)
"" Dozhi (normal, leggy, tombstone)
"" Evening Star "or bear" Abandoned child "(R)
"Hanged" (R)
"A long black candle or black marabozu"
"" Falling Star "(R)
"" Top "
"Three Black Crows" (R)

Bear turning candles and candle patterns suggest that the pressure of the buyers were suddenly overcome selling pressure and has to prevail. Such a rapid shift indicates an excess of proposals and the possibility of the formation of resistance.

"Hanged", a long black candle and the black marabozu shows the increasing pressure of sellers rather than the actual turn. After a long lower shadow "hanging" points to the intra-session selling pressure, which by the end of the session has been overcome. Even though the market closed above the tool its minimum, the ability of sellers to maintain prices below are in doubt. A long black candle and the black marabozu show supported by the pressure of sellers, which allow you to move the price down from beginning to end. Such intense pressure on the weak signals of sellers and buyers' resistance level can be set. "Dozhi" and "top" shows indecision and generally considered to be neutral. These nerazvorotnye models indicate a reduced pressure of shopping, but also a slight increase in sales. To continue improving, new buyers should be willing to pay higher prices. As the "top" and "dozhi, tie shows a lack of confidence among buyers and the possibility of the formation of resistance.

In late May, Veritas (VRTS) has risen from 90 to 140 in about two weeks. The final leap occurred with GEPom and two "dozhi. These "dozhi" signaled the sudden confusion among buyers and sellers, and subsequently formed the level of resistance. Once the resistance was tested in mid-June, created another "dozhi, indicating that buyers do not have enough confidence. This led to a decline and subsequent recovery in early July. Increased share of the lead 105 to 140, which created another "dozhi" Affirming the resistance level set in early June.

Lucent (LU) traded in a range, limited levels of 65 and 52, for about 4 months. Resistance was first identified in late April, "shooting star" and "a veil of dark clouds." Both of these bear were confirmed GEPom turn down two days later, and testing support at 52. Once the action closer to the support of 52, began to form a candle with a long lower shadow and has a turn at the end of May. After a sharp rise, the movement was met with resistance and the other "a veil of dark clouds" formed from the resistance at the beginning of June. Buyers clearly lacked confidence near 65, and sellers eager to sell their shares. Final testing of the resistance occurred in mid-July. After one break above 65, the action unfolded and closed back below 65. The rest is - history.

After the spring increasing the DAL first found resistance at 57 in early April with a "shooting star" in the top. The action has sharply declined, but returned again to test the resistance at 57 in May. In May, near a cluster of resistance was a "shooting star", "tops" and leggy "dozhi. What happened decline below the 56 confirmed Medvezhye movement and action tested support in the area 50. After another raise to 57, the action, it seemed, was on the verge of a breakthrough. However, the formation of a small white candle in the middle of July (black circle). GEO-up may have been positive, but pointed to the lack of continuing uncertainty about buyers. Further down, formed a disservice GEO "evening star" and the campaign has fallen back again to the level of support.



Forex Magazine
based on Stockcharts.com

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