The power of candle charting....

I've been studying Japanese Candlestick Charts for a while now and to be honest I hate the use of the Japanese names and/or their short form English names like "doji", or "evening star", or "hanging man", and the list of those names goes on, and on. They don't have any intuitive meaning to me.

For me, it's easier to actually look at an image and describe it, and here is where I'm going to give a huge plug to my favourite charting site StockCharts.com.

That is, without a doubt the best free charting site that I have ever found. I'm told that if you pay for membership you can get real-time charting. But that would not be the point of this post. I want to highlight a "japanese candle" that I don't see very often, but I recognize it as a "low reversal candle" because of its distinctive "unfilled red border color".


This candle shows that the stock opened below the previous close. That is why it is red in color. Because the stock closed above the open the candle remained "open, or unfilled". It is a rare candle and it is a sign of support in the market. It is a reversal signal, but like all candlesticks it requires a supporting candlestick.

Today, one day later we can see a "bullish rebound" candle in the NYSE Group stock. There will be no silly japanese names here. I call them as I see them!