Different Bullish and Bearish Candlestick Pattern Formations

Thursday, April 30, 2009

Bearish Meeting Lines Candlestick Pattern

Bearish meeting lines is a bearish market reversal candlestick pattern indicating the beginning of a downtrend after an uptrend. It is a two candlestick pattern formed of a bullish (colorless or white) candlestick and a bearish (colored or dark) candlestick. The pattern resembles Bearish Dark Cloud Cover pattern, but here the second candlestick does not enter into first day candlestick’s real-body, and also the pattern is less reliable than dark cloud cover.

Wednesday, April 29, 2009

Linear Weighted Moving Average or LWMA

Linear weighted moving average or LWMA is a moving average tool which assigns more value to current prices and thus more responsive to latest price trends. It is less popular than simple moving average or SMA and exponential moving average or EMA. Like EMA, LWMA was also created to overcome the lagging associated with simple moving average.

Tuesday, April 28, 2009

Opportunities that Active ETFs Offer

In addition to just outperforming the benchmark indexes, actively managed Exchange Traded Funds (ETFs) offer some other opportunities to traders, both individual and institutional. These opportunities emerge from the fact that ETFs have high transparency and have to disclose their holdings on a daily basis and they can be intraday traded.

Monday, April 27, 2009

Weekly Stock Market Newsletter, April 27, 2009

The Week Ahead: Only the Nasdaq index managed a seventh straight up week of the three major indices as bearish divergences start to develop in the stock market. Reports to watch are the S&P Case-Shiller Home Price Index and consumer confidence on Tuesday. The FOMC also begins its two day meeting on interest rate policy as well. The FOMC will deliver its policy statement on Wednesday when Q1 preliminary GDP for the economy is released. Jobless claims and personal income and spending numbers are released Thursday. The ISM Manufacturing report is due Friday.

Wednesday, April 22, 2009

What is Coverdell ESA?

Coverdell Education Savings Account (ESA), formerly known as Education IRA, is a trust account created for paying qualified educational expenses to the account beneficiaries. These accounts can be opened with banks, brokerage firms, with mutual fund firms and other financial institutions. The funds in these accounts are invested in financial instruments like stocks, bonds, funds, etc.; as chosen by the person controlling the account.

Bullish Kicking Candlestick Pattern

Bullish kicking is a rare but highly reliable bullish candlestick pattern which indicates the beginning of a new uptrend. The pattern consists of two opposite candlesticks – one bearish (black or colored) candlestick and one bullish (white or colorless) candlestick. In bullish kicking pattern, both candlesticks are marubozu (having no or very small upper and lower shadows). This pattern has a strong resemblance to bullish separating lines pattern, the only difference is that it has a gap between the two candlesticks.

Trading the Market with MACD

Moving Average Convergence/Divergence or MACD are simple yet effective indicators for generating buy and sell signals and to understand trend changes. MACD simply compares a long-term and a short-term exponential moving average to identify existing market trend.

Tuesday, April 21, 2009

Moving Average Convergence Divergence or MACD

Moving Average Convergence/Divergence or MACD is one of the most widely used indicators by all kinds of traders trading all kinds of instruments. MACD is a lagging indicator which can be used to analyze the strength of the trend, to find overbought and oversold conditions and to generate buy and sell signals.

Monday, April 20, 2009

Weekly Stock Market Update, April 20, 2009

The Week Ahead: The market managed its 6th straight up week, the largest since May of 2007 as CitiGroup and General Electric came in with better than expected bottom lines. Can it continue? The March leading economic indicators are due out on Monday while the oil and gas inventory numbers come out Wednesday. Jobless claims and existing home sales are reported Thursday, but durable goods orders and new home sales will wait until a Friday release.

Friday, April 17, 2009

Types of Market Analysts

There are many types of market analysts in stock markets analyzing, reviewing and reporting about companies, their fundamentals and growth prospective, future performances and more. We can classify these analysts into three broad classes as sell-side, buy-side and independent market analysts. Remember, we are not talking about individual analysts who provide daily or weekly market commentary/prediction; we are talking about big and small analysis firms.

Thursday, April 16, 2009

Bearish Kicking Candlestick Pattern

Bearish kicking is a bearish reversal candlestick pattern, which indicates the start of a new downtrend. It is a rare but highly reliable formation consists of two candlesticks – one bullish (white or colorless) candlestick and one bearish (black or colored) candlestick. Both are marubozu candlesticks (having no upper and lower shadows, or having very small shadows). Bearish kicking pattern has a strong resemblance to bearish separating lines pattern, the difference is that it has a gap between the two candlesticks.

Wednesday, April 15, 2009

Chaikin Oscillator

Chaikin Oscillator, also known as Chaikin Accumulation/Distribution (A/D) Oscillator, is a lesser known but effective indicator to analyze money flow, to confirm trends and to predict trend changes. The indicator was created by Marc Chaikin and hence the name. Simply, Chaikin oscillator is the Moving Average Convergence Divergence (MACD) applied to Accumulation Distribution line. Know more about Accumulation/Distribution indicator.

Tuesday, April 14, 2009

Investing in Bond ETFs

Bond Exchange Traded Funds (ETFs) are one new investment option available for investors who want steady long-term returns, portfolio diversity and lower-risk. Bond ETFs helps traders to overcome the lesser transparency and liquidity in bond market (except for some liquid bonds). More over, unlike bonds, the investors can monitor them more accurately as the historical and current prices are readily available.

Monday, April 13, 2009

Weekly Market Newsletter, April 13, 2009

The Week Ahead: Investor anxiety continues to ease on reports such as the profit numbers from Wells Fargo and a shrinking trade deficit by 28%. Markets will look at the Producer Price Index, retail sales, business inventories, and consumer confidence on Monday. Tax day on Wednesday brings the CPI, industrial production, and mortgage applications. The housing starts, building permits, and jobless claims data are due Thursday. Friday, the University of Michigan's Consumer Confidence report is released.

Thursday, April 9, 2009

Bearish Advance Block Candlestick Pattern

Bearish advance block is a candlestick trend reversal (or top reversal) pattern which indicate the end of a current uptrend. It is a three candlestick pattern which, at first glance, resembles Bullish Three White Soldiers pattern. But there are two key differences, three white soldiers are formed in downtrends and advance block are formed in up-trends, and in bearish advance block the real-bodies of second and third candlestick are smaller and upper shadow are longer than previous candlestick’s.

Wednesday, April 8, 2009

Exponential Moving Average

Exponential moving average or EMA, also known as Exponentially Weighted Moving Average, is one of the most widely used trend-following tools especially by swing traders and long-term traders. EMA is created to overcome the limitations of simple moving average; EMA is less simple and less lagging. Exponential moving average is also used to create other effective indicators like Percentage Price Oscillator (PPO) and Moving Average Convergence Divergence (MACD)

Tuesday, April 7, 2009

Weekly Stock Market Update, April 6, 2009

The Week Ahead: A jump in the unemployment rate to 8.5% was not enough to halt the current rally indicating the markets have discounted much of the bad news already. Reports to watch this week include consumer credit on Tuesday along with the minutes of the FOMC March meeting. Jobless claims which seem to be a leading indicator for the employment report are due out on Thursday along with import prices for March. Friday, the markets are closed for the Good Friday holiday.

Monday, April 6, 2009

Sector ETF Investing Advantages and Disadvantages

There are now a number of types of Exchange Traded Funds (ETFs) available to choose from. Sector ETFs which track one or more sectors like energy, financials, industries, health care, utilities, technologies, etc. and broad market based ETFs are two broad ETF types available. Here are some advantages and disadvantages of investing in sector ETFs over broad market based ETFs.

Friday, April 3, 2009

Compounding – Advantages and Disadvantages

Compounding is the process of reinvesting the previous earnings (profits) to generate more profits. For example suppose a trader makes 5% profit as an average per trade and his initial position size is $1,000. By keeping the position size constant for consecutive traders (e.g.: 5 trades) he can achieve a profit of $250 or 25% of his initial investing capital. If the trader is compounding, after 10 trades the trader can have a position size of $1276.2 and a total profit of $276.2 or 27.6% of initial investing capital. More over the position size grows continuously (1000, 1050, 1102.5, 1157.6, 1215.6…) and the trader can make more profits.

Thursday, April 2, 2009

Bullish Belt Hold Candlestick

Bullish belt hold is a trend-reversal candlestick pattern which indicates the end of a downtrend and beginning of a new uptrend. It is a single candlestick pattern formed of a long white (bullish or colorless) candlestick, which is an opening marubozo having no lower shadow. Bullish belt hold candlestick occurs frequently and is considered less reliable; thus it is vital to confirm the trend change.

Wednesday, April 1, 2009

Moving Average Envelopes

Moving average envelopes, also known as price envelops, percentage envelops, trading bands and moving average bands, are moving average bands used for different trading purposes. They are lines running above and below the moving average creating a trading band and can be used 1) as support and resistance levels, 2) for identifying overbought and oversold conditions and 3) to generate buy and sell signals.

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