Hi, Denise. I'm still learning, but candlesticks have worked the best for me so far. I really like them, too. If you want to read a great book on them, Steve Nison's "Japanese Candlestick Charting Techniques" is excellent. You can find it at Chapters, etc.
FWIW, when looking at WEB's chart, I see the March 23 hammer as significant, indicating the end of the downtrend. The March 30 hanging man shows vulnerability in the market - the doji on March 31 confirms the indecision but is also significant in that is has now formed support/resistance lines (top/bottom of its legs). This doji definitely would have peaked my interest - occurring after a hanging man, but I would want some confirmation. The bulls and bears are fighting here. The gap up on April 1 looks like some confirmation but was weak, given its hanging man appearance. The doji on April 7 confirms the support/resistance level established on the 31st (hitting what is now a support level) and is significant in that. Still, appearing during a downtrend, I would look for confirmation, which was provided on the following day. (I am still somewhat conservative since I have not been doing this a long time).
I see the potential for an evening star formation starting on Thursday and Friday (8th and 9th) - the bullish engulfing pattern followed by a small body. If followed on Monday by a bearish candlestick that moves well into the candlestick of the the 8th, this shows a top (normally this pattern appears in an uptrend). If there is a small bearish candle, the pattern will not have been formed, but definitely showing weakness. A doji would be an indication of a top as well. Should WEB break through the resistance level established in Feb, this would bullish (how much so dependant upon the strength of the advance).
On the head and shoulders - you will soon see how bad I am at this. I could see a potential for the left shoulder in Jan with the head in Feb, and maybe the right shoulder in April, but doesn't the right shoulder have to be below the head? Or, perhaps Jan and Feb is forming the left shoulder, April will be the head, and then the right shoulder is yet to follow? That's all I can see and from my incredibly weak technical analysis skills, don't think I see a head and shoulders. Any insight you could provided would be very much appreciated.
Thanks very much for your comments, Denise. And the questions too!
This stuff is great - really helps the trading.
Regards, t. |
