Significant Marubozu Candle Patterns – Big Moves Lower Coming?

The article was written after the market closed on July 31, and on August 1 we are already seeing the downside movement in the stocks with this marubozu pattern.

-Potash Corp of Sask. (NYSE:POT)

-Priceline.com (Nasdaq:PCLN)

-Lowe’s (NYSE:LOW)

-and one other less well known company

Significant Marubozu Candle Patterns – Big Moves Lower Coming?

The black marubozu is simply a long black (down, or red on the charts below) candle, with little to no upper or lower shadows. The pattern shows that sellers controlled the trading day from open to close, and is therefore a bearish pattern. The candlestick can provide a trade signal or analytical insight into the future direction of a stock price. While it is a bearish pattern, often the context in which it occurs is more important than the candlestick itself. Seller control is especially worth watching near resistance and near support, as either case provides the likely possibility of further selling. When the market closed on July 31, four stocks had significant black marubozu candlesticks. With the right context in place, these stocks face potentially big moves over the next week.

Read more on Investopedia: http://www.investopedia.com/stock-analysis/cotd/POT20120801.aspx#ixzz22KJ0FbBH

Regards,

Cory Mitchell, CMT

VantagePointTrading

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