Universal Energy Corp (UVSE)

[big pimpin since 73]

Hope I don't get into trouble for this post...

But this is just "FYI" to examine these situations...

Courtesy:

http://www.zecco.com/blogs/itradestations_blog/Candlestick-Analysis.aspx



The Candlestick technique was developed by Japanese rice traders and used over a 400 year period. The Candlestick methodology got its major refinement in the mid-1800s by Kosaku Kato, who was adopted by the Honma family, and became known as Sokuta Honma. His successful interpretation of the Candlestick technique made him the most respected rice trader in Japan at that time and became legendary.

The Candlestick technique was introduced to analyze the stock market and worked extremely well, especially in forecasting a trend reversal. Please remember that the Candlestick had been used for over 400 years and proven the effectiveness.

Let's go over the basic of the Candlestick...



Marubozu

In Japanese, Marubozu means close-cropped or close-out. Bald or Shaven Head is the more commonly called in the western. Marubozu has no shadows extending from either end of the body.

Long Days

The long day represents a large price move from open to close. Long represents the length of the body.

Short Days

A short day represents a small price move from open to close, where the length of the candle body is short. However, there is a large percentage of trading days that do not fall into either of these two categories.

Spinning Tops

Spinning Tops are depicted with small bodies relative to the shadows. It shows some indecision on the bulls and the bears. They are considered neutral when trading in a sideways market.

Doji

It is one of the most important signals in Candlestick analysis. It is formed when the opening and the close are the same or nearly the same. The lengths of the shadows can vary. The Doji implies that the bulls and the bears are in a state of indecision. It is an important alert at both the top and the bottom of trends. If Doji shows at the top of the trend, close the long position immediately. The uptrend will reverse.

In the following section, a few "major signals" are shown during a reversal trend.

Engulfing Patterns

The engulfing pattern is a major reversal pattern comprised of two opposite colored bodies. The bullish engulfing is shown above. The engulfing pattern usually appears at the end of an uptrend of downtrend. The body at the 2nd day of the signal must completely engulf the previous body. The longer the 2nd day body, the greater probability of a strong reversal.

Hammers and Hanging Man

The hammer comprised of one candle. It is identified by the presence of a small body with a shadow at least twice greater than the body. The color of the small body is not that important but a white candle is slightly more bullish. The hammer at the end of a downtrend gives an early sign that the downtrend may end soon. A second positive day is required for a confirmation.

The hanging man looks the same as the hammer, but is formed during an uptrend.

Piercing Pattern

A bullish two day reversal pattern. The first day is a black candle from a downtrend. The next day opens at a new low, then closes above the midpoint of the body of the first day.

Dark Cloud Cover

It is a bearish counter part of the Piercing Pattern. A bearish reversal pattern that continues the uptrend with a long white body. The next day opens at a new high then closes below the midpoint of the body of the first day.

Harami

The Harami is an often seen formation. The Harami is composed of a two candle formation, while the candle is the same color of the current trend. The first body engulfs the second body. Its presence indicates that the trend is over. Further confirmation is required for a reversal signal.

Morning Star

The Morning Star is a bottom reversal signal. A three day bullish reversal pattern that is very similar to the Morning Star. The first day is in a downtrend with a long black body. The next day opens lower with a Doji that has a small trading range. The last day closes above the midpoint of the first day.

Evening Star

It's the bearish counter part of the Morning Star. A bearish reversal pattern that continues an uptrend with a long white body day followed by a gapped up small body day, then a down close with the close below the midpoint of the first day.

Shooting Star

The shooting star is comprised with one candle. It looks like an inverted hammer at the top of the uptrend. Take note of the shooting star for a bearish sign. The following day needs to confirm the Shooting Star signal with a black candle or better yet, a gap down with a lower close.