Happy new year and good evening to all Gurus of this Board.
I am an active trader for more than 5 years and currently I am trading only in options. For the last one year we ( me and my friend) are reading the candlestick charts of NIFTY. We observed a strong reversal pattern today and just now we published an article in our Blog ( I know I should not paste any links of my own sight, so I will
not violate the rules of this elite community).
The reason I am posing this here is, The signal is very important and F&O Traders are the the people who are going to be affected or benefited by this signal.
Here is the observation of our Candlestick reading :
Use the attachment for ref :
The short term Rally you are seeing now in NIFTY started with 4953 points on 22nd Dec-2009 from to 5277 points on 5th January-2009.
But over the period of four days(Dec 23,24,25 and 29th) the strength of the BULLS were weakening. This formed a pattern called "Advance Block" or "Saki Zumarii" in Japanese.
Definition of Advance Block pattern :
Advance block shows signs of weakness. The bodies are diminishing as prices rise and the upper shadows becoming longer indicate that the bulls are getting more resistance from the bears. This pattern is going to occur in an uptrend or occurs during a bounce up in a downtrend. It is visually obvious that the rise is losing its power. After an uptrend or a bounce up during a long downtrend, the Advance Block will show itself with an initial strong white candle day. After three days of waning strength, the bears should confirm the reversal with further deterioration.
* Each white candle occurs with higher closes.
* The opens occur in the previous days body
* The bodies are getting smaller and/or the upper shadows are getting longer.
A Red candle on 30th Dec-2009 did confirmed the advanced block pattern, But It didn't confirmed very well. That's not the end of the story.
On 5th of January (Today) market showed a clear indication of Trend reversal, An evening star pattern with Doji.
Definition of Evening Star (Sankawa Yoi No Myojyo).
The Evening Star is a top reversal signal. Like the planet Venus, the evening star, it foretells that darkness is about to set or that prices are going to go lower. It is formed after an obvious uptrend.
It is made by a long white body occurring at the end of an uptrend, usually when the confidence has finally built up.
The following day gaps up, yet the trading range remains small for the day. Again, this is the star of the formation.
Note : Up to this point already happened. If the following happens on 6th Jan 2009, It is confirmation of Evening star, which is a strong reversal signal.
The third day is a black candle day. And represents the fact that the bears have now seized control. That candle should consist of a closing that is at least halfway down the white candle of two days prior. The optimal Evening Star signal would have a gap before and after the star day.
The signal is a strong reversal signal. An intelligent trader should think rationally.
The Doji ( which occurred today in evening star, the cross symbol ) is one of the most important signals in Candlestick analysis. It is formed when the open and the close are the same or nearly the same. The lengths of the shadows can vary. The longer the shadows are, the more significance the Doji becomes.
The Japanese say when a Doji occurs, one should always take notice. At the top of a trend, the Doji signals a reversal without needing confirmation. The rule of thumb is that you should close a long or go short immediately.
However, the Doji occurring during the downtrend requires a bullish day to confirm the Doji day. The Japanese explanation is that the weight of the
market can still force the trend downwards.
Putting them all to gather, If 06-Jan-2010 opens with a gap down with more than 20 to 50 points, then, It confirms the Advance block, The evening star and the Doji on top of the bull trend.
I am an active trader for more than 5 years and currently I am trading only in options. For the last one year we ( me and my friend) are reading the candlestick charts of NIFTY. We observed a strong reversal pattern today and just now we published an article in our Blog ( I know I should not paste any links of my own sight, so I will
not violate the rules of this elite community).The reason I am posing this here is, The signal is very important and F&O Traders are the the people who are going to be affected or benefited by this signal.
Here is the observation of our Candlestick reading :
Use the attachment for ref :
The short term Rally you are seeing now in NIFTY started with 4953 points on 22nd Dec-2009 from to 5277 points on 5th January-2009.
But over the period of four days(Dec 23,24,25 and 29th) the strength of the BULLS were weakening. This formed a pattern called "Advance Block" or "Saki Zumarii" in Japanese.
Definition of Advance Block pattern :
Advance block shows signs of weakness. The bodies are diminishing as prices rise and the upper shadows becoming longer indicate that the bulls are getting more resistance from the bears. This pattern is going to occur in an uptrend or occurs during a bounce up in a downtrend. It is visually obvious that the rise is losing its power. After an uptrend or a bounce up during a long downtrend, the Advance Block will show itself with an initial strong white candle day. After three days of waning strength, the bears should confirm the reversal with further deterioration.
* Each white candle occurs with higher closes.
* The opens occur in the previous days body
* The bodies are getting smaller and/or the upper shadows are getting longer.
A Red candle on 30th Dec-2009 did confirmed the advanced block pattern, But It didn't confirmed very well. That's not the end of the story.
On 5th of January (Today) market showed a clear indication of Trend reversal, An evening star pattern with Doji.
Definition of Evening Star (Sankawa Yoi No Myojyo).
The Evening Star is a top reversal signal. Like the planet Venus, the evening star, it foretells that darkness is about to set or that prices are going to go lower. It is formed after an obvious uptrend.
It is made by a long white body occurring at the end of an uptrend, usually when the confidence has finally built up.
The following day gaps up, yet the trading range remains small for the day. Again, this is the star of the formation.
Note : Up to this point already happened. If the following happens on 6th Jan 2009, It is confirmation of Evening star, which is a strong reversal signal.
The third day is a black candle day. And represents the fact that the bears have now seized control. That candle should consist of a closing that is at least halfway down the white candle of two days prior. The optimal Evening Star signal would have a gap before and after the star day.
The signal is a strong reversal signal. An intelligent trader should think rationally.
The Doji ( which occurred today in evening star, the cross symbol ) is one of the most important signals in Candlestick analysis. It is formed when the open and the close are the same or nearly the same. The lengths of the shadows can vary. The longer the shadows are, the more significance the Doji becomes.
The Japanese say when a Doji occurs, one should always take notice. At the top of a trend, the Doji signals a reversal without needing confirmation. The rule of thumb is that you should close a long or go short immediately.
However, the Doji occurring during the downtrend requires a bullish day to confirm the Doji day. The Japanese explanation is that the weight of the
market can still force the trend downwards.
Putting them all to gather, If 06-Jan-2010 opens with a gap down with more than 20 to 50 points, then, It confirms the Advance block, The evening star and the Doji on top of the bull trend.