Reading Stock Charts – The ‘Stick Sandwich’

Reading a stock chart can be overwhelming at first glance. Candlestick Signals and patterns make reading a stock chart quick and easy. A brief look at Stock Investing Basics with Candlesticks, shows the visual comparison between reading stock charts with Candlesticks versus Bar Charts.

Individuals new to trading the stock market have a number of decisions to make regarding their chart preferences. Choosing Candlestick Charts, versus ‘Bar charts,’ makes for a quicker  evaluation of price trends. Reading a stock chart in the ‘Bar’ format makes it very difficult to interpret impending price reversals. Identifying stock chart reversals, continuations, and consolidation is paramount when reading a stock chart. Even professional  investors are taking courses to trade with Japanese Candlesticks. That should tell you the importance of using candlesticks for reading stock charts.

Candlestick charting provides a quick graphic depiction easily learned by new investors. Bar charts illustrate what price movements did during a specific time frame. Reading a stock chart, displayed with candlesticks, reveals HOW and WHY the price moved. Fundamentals do not make price moves. Investor perception determines the underlying price and Candlestick Signals clearly demonstrate investor sentiment. This provides valuable insight when reading a stock chart. The ability to evaluate trades with profitable entry and exit strategies will make-or-break your portfolio. Reading a stock chart accurately is the first step for investor education. Our website is designed to help all investors learn to read Candlestick Signals and Candlestick Chart Patterns. Pages are in a printer-friendly format to allow you to print the illustration and trading criteria for quick reference during your trading day.

Be sure to begin your training with our Free Resources Section on The Major Candlestick Signals.

Stick Sandwich


The Stick Sandwich looks somewhat like an ice cream sandwich. it consists of two dark candles with a white candle in between. The closing prices of the two black candles are equal. This demonstrates an obvious support price. The probability of a reversal in the trend is high from this area.

  1. A downtrend is concluded with a large black candle followed by a white candle. The white candle opens above the black candle’s close, and closes above the black candle’s open.
  2. The final day completely engulfs the white candle and closes at the same level as the previous black candle.

Pattern Psychology
The Bears have been in control for awhile. At the end of the downtrend, the last black candle is followed by a large white candle. The white candle opens higher than the close of the last black candle. It trades up for the rest of the day, closing above where the previous day opened. This action makes apparent to the Bears that the downtrend may be coming to an end. The next day opens higher but trades down for the rest of the day. It cannot close lower than the previous low close of two days prior. The shorts take notice and start covering upon any buying strength over the next couple of days.
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