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I BELIEVE (and boy am I no expert...) that a candle with a long upper wick is considered bearish, also known as a shooting star. It LOOKS like you’ve got the inverse of a Three White Soldiers, which would be moving upwards... Funky. Maybe it’s a 3 Black Crows in disguise??
I’d take a close look at volume on those 3 bars, and if the volume is shrinking, it could mean that fewer people are interested at the lower prices, which could bring price back up if the sellers vanish. I think the key thing is that you’ve got successive lower highs and lower lows, which is generally bearish. Think about it – if you’d gone long at the low of the first bar, you’re feeling pretty good as it moves up... But then suddenly you’ve got this big gap DOWN and now you’re hurting. So maybe you wait a while for it to retrace and fill the gap, which it does but fails to make a new high, and then you decide “to hell with this, I’m out flat...” and sell, adding to the pressure pushing it down. Then someone else does the same thing on the second bar, third bar... You get the picture.
I have no clue that this is actually what’s HAPPENING mind you, I’m just thinking off the cuff...
I really like candle patterns, but just remember they always work best in conjunction with everything else, and don’t tell the whole story on their own. =)
Jonathan
On 12/15/03 8:32 PM, "Greg" <gregbean@xxxxxxxxxxx> wrote:
Hi,
I'm trying to learn about candle patterns and wondered if anyone could tell me something about the last three white candles. Is this bullish (possibly accumulation)? Or bearish? Most MA's are flat or pointing down, so I'm thinking this might be a bearish situation. But maybe it will reverse direction and move up to at least the 144 MA. Anybody care to take a crack at this?
Greg
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