Tuesday, April 02, 2013 7:06:57 PM
FNMA Chart: Bearish Doji reversal pattern formed today.......there's also a GAP between HOD yesterday & LOD today.......
The Doji can be considered either a Long Legged Doji or a Bearish Doji Star.........regardless, a Doji formed @ the Top & this signals a pullback........
Long Legged Doji is a doji characterized by very long shadows. It shows the indecision of the buyers and sellers and it is an important reversal signal.
Recognition Criteria:
1. Market is characterized by overall uptrend.
2. Then we see a Doji that gaps in the direction of the uptrend.
3. The real body of the Doji is either a horizontal line or it is significantly small (its length is not more than a few ticks).
4. The upper and lower shadows of the Doji are long and almost equal in length.
Explanation:
This particular doji shows that there is a great amount of indecision in the market. Long-legged Doji shows that the prices traded well above and below the opening price however they closed virtually at the level of the opening price. We have an end result with little change from the initial open despite all the excitement and volatility during the day showing that the market has lost its sense of direction.
Important Factors:
Long Legged Doji is more important at tops.
Since the Long Legged Doji is a single candlestick pattern, it is better to see confirmation in the form of a move opposite to the prior trade on the next trading day.
A short candlestick, a spinning top, a highwave or a doji following a white candlestick with an upside gap during an uptrend, is the Bearish (Doji) Star Pattern.
Recognition Criteria:
1. Market is characterized by uptrend.
2. We see a long white candlestick in the first day.
3. Then we see a short candlestick, a spinning top, a highwave or a doji that gaps in the direction of the previous trend on the second day.
4. The shadows of the short candlestick, spinning top, highwave or doji are not long.
Explanation:
Bulls control the market in a strong uptrend. The appearance of a Bearish (Doji) Star Pattern in such an uptrend shows that buyers are now losing the control and market is moving to a deadlock between buyers and sellers. This deadlock or balance between buyers and sellers may result because of a diminition in the buying force or an increase in the selling force. Whatever the reason is, the star tells us that the strength of uptrend is now dissipating and the market is increasingly vulnerable to a setback.
Important Factors:
A confirmation on the third day is required to convincingly show that the uptrend has reversed. This confirmation may be in the form of a black candlestick, a large gap down or a lower close on the next trading day.
FNMA on confirmation of the Bearish Signal Radar..........$$$
The Doji can be considered either a Long Legged Doji or a Bearish Doji Star.........regardless, a Doji formed @ the Top & this signals a pullback........
Long Legged Doji is a doji characterized by very long shadows. It shows the indecision of the buyers and sellers and it is an important reversal signal.
Recognition Criteria:
1. Market is characterized by overall uptrend.
2. Then we see a Doji that gaps in the direction of the uptrend.
3. The real body of the Doji is either a horizontal line or it is significantly small (its length is not more than a few ticks).
4. The upper and lower shadows of the Doji are long and almost equal in length.
Explanation:
This particular doji shows that there is a great amount of indecision in the market. Long-legged Doji shows that the prices traded well above and below the opening price however they closed virtually at the level of the opening price. We have an end result with little change from the initial open despite all the excitement and volatility during the day showing that the market has lost its sense of direction.
Important Factors:
Long Legged Doji is more important at tops.
Since the Long Legged Doji is a single candlestick pattern, it is better to see confirmation in the form of a move opposite to the prior trade on the next trading day.
A short candlestick, a spinning top, a highwave or a doji following a white candlestick with an upside gap during an uptrend, is the Bearish (Doji) Star Pattern.
Recognition Criteria:
1. Market is characterized by uptrend.
2. We see a long white candlestick in the first day.
3. Then we see a short candlestick, a spinning top, a highwave or a doji that gaps in the direction of the previous trend on the second day.
4. The shadows of the short candlestick, spinning top, highwave or doji are not long.
Explanation:
Bulls control the market in a strong uptrend. The appearance of a Bearish (Doji) Star Pattern in such an uptrend shows that buyers are now losing the control and market is moving to a deadlock between buyers and sellers. This deadlock or balance between buyers and sellers may result because of a diminition in the buying force or an increase in the selling force. Whatever the reason is, the star tells us that the strength of uptrend is now dissipating and the market is increasingly vulnerable to a setback.
Important Factors:
A confirmation on the third day is required to convincingly show that the uptrend has reversed. This confirmation may be in the form of a black candlestick, a large gap down or a lower close on the next trading day.
FNMA on confirmation of the Bearish Signal Radar..........$$$
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