A SpikeTrade member writes:
If you look at the daily chart of the Amex Airline Index ($XAL.X in TradeStation), you will notice two Dojis and a Shooting Star in the last three trading days. Also prices are above both the 200-day and 50-day MAs and there are divergences with the Stoch, CCI and RSI on daily charts indicating a possible reversal.
Two components of $XAL.X: ALGT and ALK look as good short candidates.
Of course RYAAY, Bob B’s pick of last week, is still also a candidate even thought it is not part of the index.
Good trading,
Jean G
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On a different subject I have found several candlesticks patterns that may be interesting to some spikers.
ReplyDeleteI believe not many traders look at monthly charts, so few people may have noticed the Long Legged Dojis and/or Rickshaw Men formed on the December charts of four Ultra ProShares.
• MVV (ProShares Ultra MidCap 400)
• QDL (ProShares Ultra QQQ Trust)
• SAA (ProShares Trust Ultra Small Cap 600)
• UWM (ProShares Ultra Russell 2000)
Furthermore several other Ultra Proshares exhibit a similar pattern called High-Wave line. These are not dojis but have a small real body and long shadows.
According to Steve Nison a “Long Legged doji is an especially important doji at tops”. These are at the bottom or what may become a bottom and therefore may or may not be significant but, like all long legged dojis, they reflect irresolution. Of course December is not finished yet and these patterns may change between now and the 31st. But there are few trading days left in the month and not very active days at that so these patterns may not change significantly between now and the beginning of 2009.
Do these formations portend a change in trend in the early part of 2009? Only time will tell of course. But as they say in French “un homme averti en vaut deux” (forewarned is forearmed).
Happy holidays,
Jean G