Internet Stock Investing Expedited With Candlestick AnalysisThe major advantage with internet stock investing today is the amounts of information that is available to investors in the matter of seconds. Just a mere ten years ago, obtaining investment information was a long process. Now internet stock investing has the capabilities to extract all the research and analytical information required for investors to make intelligent decisions versus depending upon the “professional” advisors.
Additionally, candlestick analysis is a vital element for making stock market analysis quick and easy. Internet stock investing can be done with much more precision when being able to analyze all the factors that are influencing the overall market direction. This past week, the price of crude oil became the determinant for the lack of enthusiasm. However, knowing that crude oil is the damper on the markets, then being able to identify the signals in the crude oil chart that reveal a break in the prices gives the candlestick investor an advanced alert to when the bottom of the stock market may come into play. Candlestick charts reveal what is actually happening.
Note that the price of crude oil is accelerating when the stochastics are in the overbought area. This is usually an alert that a reversal potential is in the making. Additionally, the price of oil is the headline topic on all the major financial news stations. This is also a sign that a major trend change will probably be very near.
Internet stock investing has the ability to chart stock trading not only on a daily basis, but also a minute by minute basis, the same capability as the “professionals” on Wall Street. Also, the internet provides the opportunity to be able to do candlestick analysis on all investment vehicles that are influencing investor sentiment right at that particular time, such as interest rates, the dollar, oil prices or anything else.
Market Direction - The DOW revealed a strong Morning Star early this week, but the bullish candle that formed the Morning Star signal was negated two days later. One aspect that should be noted is the volatility occurring when the stochastics are in the oversold area. Volatility becomes more prominent near a major turn in the trends. Another technical consideration is the trading approaching the 1000 day moving average.
Usually when trading gets this close to a major technical level, as we are seeing in the DOW chart, that level will usually be touched. Knowing that, looking for a candlestick signal at that level, such as a hammer signal with the tail just touching the 1000 day MA line, would create an opportunity to buy with confidence at the bottom of this latest trend.
If the long term chart supports at the 1000 moving average, that could be the pullback phase of a 1-2-3 wave. That would mean the next upmove could be long and strong.
Add that to being able to see a strong sell signal in the oil prices would give more reason to start adding to the longs. As seen in our recommended stock list, there are still a few short positions open, and they have performed very well in this downtrend. They are all getting to the oversold areas themselves, the analysis provided by the other market influences can act as alerts for being ready to cover some of the short positions at the most profitable points. Being prepared for a potential bottom provides the alert to watch for candlestick buy signals that would close out the short positions. This is not rocket science, this is using the signals that have worked for centuries to illustrate what investment sentiment is doing.
Friday, the DOW closed with another doji with stochastics in the oversold condition. This makes Monday an easy analysis. If the futures are up in the premarket, you can add to longs, if the futures are down, look for the test of the 1000 day moving average, at about the 9721 area.
The NASDAQ formed a Homing pigeon signal, a derivative of the harami signal, when the stochastics are deep in the oversold condition. This also reveals that the Nasdaq downtrend may be very close to the bottom. The same preparedness can be applied to the Nasdaq. If the futures are down on the open Monday, look for a potential reversal signal. If the futures are positive Monday premarket, start adding to longs immediately.