Candlestick Trading Forum
keyword search

Candlestick Trading Forum        

Technical Analysis of Stocks How to use Candlestick Signals

Technical analysis of stocks becomes dramatically improved when utilizing candlestick signals. However, the end of the year becomes a perfect time to analyze the possibilities for the coming year.  Technical analysis of stocks works extremely well for analyzing what stocks are doing on a current basis. A fundamental analysis of what the next year could produce should be an exercise for investors to at least target the potential sectors of the markets that should do well.  Unfortunately, this becomes a nebulous exercise.  Investors/analysts project what might be the strong sectors for the coming year, but it will be the results of candlestick signals that demonstrate where investor sentiment is committing funds. Technical analysis of stocks, utilizing candlestick signals, is the graphic visualization of what investors are perceiving in a stock/sector based upon the investor sentiment that is occurring right now.

The analysis of the potential for the coming year involves a much broader perspective. Is technology dead? What will be the demand for steel over the next 12 months?  How big will buying products through the Internet be in the coming year?  And, will this affect shipping related stocks?  These are all questions that can best be analyzed when witnessing the signals coming into specific sectors.  But what sectors could perform the best in 2006?

Consider the age in which we live in right now.  Five years ago, technology stocks were going through the roof. Then the bubble burst.  Technology stocks that skyrocketed, based upon their potential, started to crash.  Stock prices that traded in the hundreds of dollars were reduced back to levels of a dollar or two.  The technology bubble was over.  Or, was it?

The great expectations of what technology was capable of doing were rapidly being built into stock prices in the late 1990s and early 2000s.  The crash of technology stock prices was not an indicator of technology itself.  The exuberance that made itself evident in stock prices became the first acknowledgment of what technology was doing.  As described in the book "Singularity", we are in an era where technology is pulling the economy.  A mere 25 years ago, manufacturing and service companies were the primary instigator for searching out technology that would give their products a competitive edge.  A manufacturer developing a better mousetrap for their industry would now move to the forefront.  Today, technology has and is expanding so rapidly that a company has to pick and choose which technology to incorporate into their manufacturing process.  That decision now has to include researching whether the technology decided upon will be able to keep up with other technology that is available to competitors.

What new products are going to be available on the market in one year from now?  We cannot even imagine what will be available to us in the next year.  A cure for cancer?  Maybe not found in one miracle tablet, but the combination of vastly improved processes of four or five different biotech processes may be what cures cancer.  Could that happen in the next year, or the next three years?  Consider what has happened in our lifetimes. If we were born in the 19th century or before, the technology that we were experiencing was the same that our grandparents and our parents experienced.  It could also be anticipated that the same level of technology that we were experiencing was going to be the same for our children and our grandchildren. That has dramatically changed in our lifetimes. Our grandparents traveled in horse and buggies.  Today, elementary school children know how to maneuver through computer related problems as easily as we learned the multiplication tables.


Candlestick Trading Forum