ATMASphere Aug 2014
ATMASphere Aug 2014
ATMASphere Aug 2014
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This stock reversed inside of prior wide range candles. Why would a<br />
stock do this? Because all of the traders that missed out on "the big<br />
move" now have a second chance to get in. This buying pressure<br />
causes the reversal.<br />
Tip # 4.<br />
Narrow range candles lead to explosive moves<br />
Narrow range candles can also tell you that a reversal is imminent.<br />
This low volatility environment can lead to explosive moves.<br />
Narrow range candles tell you that the previous momentum has<br />
slowed down. Buyers and sellers are in equilibrium but eventually<br />
one of them will take control of the stock!<br />
Tip # 5.<br />
Find rejected price levels<br />
On candlestick charts, lower or upper shadows on candles usually<br />
mean that there is a hammer candlestick pattern or a shooting star<br />
candlestick pattern (if the shadow is long enough).<br />
Regardless of the name, these shadows mean one thing: A price level<br />
has been rejected. Imagine what this hammer candle looked like<br />
during the day (before it became a hammer). It was really bearish!<br />
But, at some point during the day, the bulls rejected the lower price<br />
level. I can imagine the bulls saying,<br />
"Hey wait a just a second. You bears have taken this too far. This<br />
stock is worth much more than the price that you moved it to."<br />
And the buying begins.<br />
AUGUST <strong>2014</strong><br />
ATMASPHERE | 11
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