Candlestick
Examples
Courtesy of Candlestickshop.com
Daily Candlestick Charting
Weekly Candlestick Charting
Bullish Harami (Weekly) Candlestick Play
Instructions
Step 1 - Pull up a Weekly chart of the stock.
Step 2- Look for a BULLISH HARAMI resting on MINOR PRICE
SUPPORT, and/or a rising Major Moving Average (10 MA, 20 MA, or 50 MA) on the
Weekly chart.
Step 3 - Pull up a Daily chart of the stock. Note that
the Harami pattern formed on the Weekly chart is made up of 5 individual
daily candlesticks.
Step 4 - Look for consolidation of the last 3 or 4 daily
candlesticks at the high price of the week. This consolidation line
represents an area where the stock takes a rest before resuming it's uptrend.
The objective is to enter the stock just before the next big upward move.
Step 5 - Enter the stock only if it breaks 1/8th above
the area of consolidation line. This will often correspond to the high price
of the week. If the stock does not break through the area of consolidation,
DO NOT ENTER THE TRADE.
Step 6 - Mark off the 50% retracement line. This will be
the halfway point between the line of support where the stock began it's
rally, and the line of resistance where the stock made it's last major
pull-back.
Step 7 - After entry, place an initial protective stop
1/8th below the low price of the previous day's candlestick. Sell the stock
immediately if the stock breaks below this price.
Step 8 - On each new day, adjust the trailing protective
stop to 1/8th below the previous day's candlestick's low price. Continue to
use a trailing stop as long as the stock remains below the 50% retracement
line.
Step 9 - After the stock has broken above the 50%
retracement line, look for a reversal candlestick. This will most likely be a
bearish candlestick which closes near it's low price of the day. Sell the
stock for profit either before the market close, or at the market open the
next day.
Financial Ad Trader
© Copyright 2003 Sunset Capital Management Ann Arbor, Michigan
