Sunday, October 26, 2008

For GT Blog October 25, 2008

Technical analysts want to know three things

- Is the price in an up trend?
- Is the price in a down trend?
- When will it reverse or change trend?

A reversal pattern can be bearish or bullish, depending upon whether it appears at the end of an uptrend (bearish engulfing pattern) or a downtrend (bullish engulfing pattern).

The first day is characterized by a small body, followed by a day whose body completely engulfs the previous day's body.

At the close Friday October 24, 2008 many gold stocks completed a bullish engulfing pattern

Candlestick charts provide graphic reversal patterns. The Candlestick Pattern below is a good example of a Bullish Engulfing Pattern – note how the white body “engulfs” the previous day – a small down day black body

Bill Carrigan


Piazzi said...

so we got an inside bar today, can it be a possible reversal to yesterday's outside bar?

The trand is down, and that, IMHO, has a high channce of being the path of least resistance until the trend changes. said...

Good observation but reversal patterns are more important if they appear on weekly charts - I watch the daily because often the daily will lead the weekly