Bearish Candlestick Formations Explained

Monday, August 31, 2009

Stock Market Trading Newsletter, August 31, 2009

The Week Ahead: Consumer spending picked up but will they continue buying after cash for clunkers and home buying credits end? Watch auto sales on Tuesday along with construction spending and the ISM Manufacturing Index. On Wednesday factory orders are released. The ISM Non-Manufacturing Survey comes out on Thursday to gauge the service sector. The much anticipated August employment report arrives Friday ahead of the long Labor Day Weekend.

Friday, August 28, 2009

What is Panic Selling?

Panic selling, as the name suggests, is the wide scale selling of instruments such as stocks. This leads to a sharp decline in the prices of the stocks and usually marks the start of a downtrend. Panic selling is often triggered by bad market news or predictions; all of which need not be true.

Thursday, August 27, 2009

Bearish Three Line Strike Pattern

Bearish three line strike is a candlestick trend continuation pattern, indicating the continuation of an existing downtrend; even after a day of high bullish activity. This is a less reliable and rare candlestick formation comprising four candlesticks; the first three are bearish candlesticks and the fourth one is a long bullish candlestick.

Tuesday, August 25, 2009

Stock Market Weekly Update, August 25, 2009

The Week Ahead: Comments by Fed chairman Ben Bernanke about a recovering economy although slow to evolve was enough to help lift markets to new highs for the year. The S&P Case Shiller Home Price Index and consumer confidence numbers are released Tuesday while the durable goods and new home sales are due by Wednesday. The preliminary Q2 GDP report will be out on Thursday, but the personal income and consumer sentiment figures will have to wait until Friday.

Price Rate of Change Indicator

Price rate of change or ROC indicator is an important technical analysis tool for measuring an instrument's price changes. ROC is widely used by short-term and swing traders to find oversold and overbought levels, to analyze trend strengths and to find trend changes. The price rate of change indicator resembles volume rate of change or VROC indicator, but is blind to volume changes.

Monday, August 24, 2009

Investing in IPO ETFs - Advantages and Disadvantages

IPO exchange traded funds are ETFs which allow traders to profit from the up-and-coming stocks. Investing in them holds many advantages and disadvantages.

Friday, August 21, 2009

IPO Investing & Trading Basics

Initial public offerings or IPOs are considered risky trading opportunities; often investors are advised to stay away from them until the price stabilizes and the growth potential of the company is revealed.

Thursday, August 20, 2009

What is Lock-up Period?

Lock-up period is the time frame when shareholders are not allowed to sell or redeem the shares of a company. This period applies to large shareholders such as hedge funds, company owners and executives, and does not apply to individual investors who bought shares via public offering. The usual lockup period can be from 90 days to 180 days; however, it can be up to one or two years for some firms.

Wednesday, August 19, 2009

Bullish Three Line Strike Pattern

Bullish three line strike is a bullish trend continuation candlestick pattern indicating the continuation of an existing uptrend after a long bearish day. This is a rare and less reliable candlestick formation. Bullish three line strike is a four candlestick formation comprising three continuous long bullish (white/colorless) candlesticks and a longer bearish (black/colored) candlestick.

Tuesday, August 18, 2009

Net Income & Related Terms

Net Income or NI, also known as bottom line, aftertax profit and profit attributable to shareholders, is defined as the total income (profit) after all expenses and taxes deducted. It is one of the figures of great importance in a company’s financial statement. This figure, usually found at the bottom line of a statement is the basis of calculating the key fundamentals of a stock such as price-earnings ratio (PER), earnings per share (EPS) and return on equity. Net income is also widely used to compare a company’s performance with its historical performance, industry performance and with other companies.

Monday, August 17, 2009

IPO Exchange Traded Funds

IPO Exchange Traded Funds or IPO ETFs are ETFs which track stocks recently held in an Initial Public Offering (IPO). They were introduced in 2006 and are gaining popularity. IPO ETFs help investors to profit from the most expected quick growth of stocks in the initial years of public trading and from some of the companies with the highest growing potential.

Friday, August 14, 2009

Advantages and disadvantages of Investing in DPPs

Direct Participation programs or DDPs are attractive investing instruments. Moreover, many of these programs have attractive marketing methods, which can drive people to them. Here are some advantages and disadvantages of investing in DPPs.

Thursday, August 13, 2009

Unique Three River Bottom Pattern

Unique three river bottom is a rare bullish candlestick bottom reversal pattern indicating the end of existing downtrend and the start of a new uptrend. This is a three candlestick formation which is formed at the end of a downtrend, first indicating market uncertainty and then bullish market reversal.

Wednesday, August 12, 2009

Volume Rate of Change or VROC Indicator

Volume Rate of Change (VROC), also known as ROCV, is an important indicator of gauging an instrument's volume changes. VROC is most useful when analyzing a security's ability to cross supports/resistances, trend changes and trend strengths and when analyzing formations like peaks and foundations. Volume rate of change indicator resembles price rate of change indicator, but it is blind to price movements.

Tuesday, August 11, 2009

Ideal ETF Only Portfolio

ETF can easily fulfill the average investor’s goal of portfolio diversification and returns that meet/beat a benchmark. With investing only in a handful of exchange traded funds, the portfolio becomes extremely diversified, liquid and profitable. Here are five types of ETFs which can be the ideal candidates for long-term investing and to include in an ETF only portfolio.

Monday, August 10, 2009

Stock Market Weekly Update, August 10, 2009

The Week Ahead: The slowing pace of unemployment helped knock the rate down to 9.4% carrying markets higher still from the July 8 low. Markets will watch the wholesale trade numbers on Tuesday as well as the start of the FOMC meeting. The International trade numbers come out on Wednesday and the decision on interest rate policy by the FOMC will follow. Thursday brings the jobless claims figure, retail sales, and import prices. Friday the Consumer Price Index is released.

Friday, August 7, 2009

Direct Participation Program or DPP

Direct Participation Program, also known as Direct Participation Plan or DPP, is a business venture which allows investors to participate directly in cash flow and tax benefits of underlying security. DPPs are considered alternative investment instruments for long-term passive investments. Most direct participation programs are for real-estate and energy related business ventures.

Thursday, August 6, 2009

Bullish Stick Sandwich Pattern

Bullish stick sandwich is a candlestick reversal pattern indicating the start of a new uptrend. This is a three candlestick formation, which usually forms at the end of a downtrend, and each candlestick forms higher highs than the previous candlestick, but has the same or almost same lows.

Wednesday, August 5, 2009

On Balance Volume or OBV Indicator

On Balance Volume or OBV indicator is a well-known technical analysis indicator, which analyses the changing trends of a stock with respect to its changing volume. OBV was introduced by Joe Granville and is one of the first volume-based indicators to measure positive and negative volume flow. It is a simple indicator which is calculated by adding or subtracting current volume to/from previous OBV.

Tuesday, August 4, 2009

Weekly Stock Market Update, August 3, 2009

The Week Ahead: Gross Domestic Product fell four quarters in a row for the first time since the 1930's even though Q2 came in less than expected. Current expectations are for GDP to expand slightly by year end but with more job losses. Look for construction spending numbers due out on Monday. Personal income and pending home sales data is due out on Tuesday. Factory orders and jobless claims figures come out Wednesday and Thursday respectively. The all important employment report is released Friday.

Monday, August 3, 2009

Less Explored ETF Trading Strategies

Exchange Traded Funds (ETFs) are probably the most flexible and diversified financial instruments available for trading and investing. Here are some less explored ETF trading strategies, most of which are short to medium term strategies. Most of these strategies demand good trading/market knowledge and money management.

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