Rectangle/Cyphers Versus Sharks/Inverted Hammer
XLV appears to be bouncing around in a rectangle for quite some time. It is a fairly wide rectangle which is neutral until a trendline is broken.
XLV appears to have formed a W pattern inside that rectangle that topped out at the 1.113 which caused a throwback and price landed back inside the rectangle. If you take a look at the bottom valleys of the W (almost like a double bottom), valley 2 is slightly lower than valley 1. So, if you flipped this over, it would be peak 1 and peak 2, and peak 2 would be higher than peak 1, but only if you flipped it over. You have to use your imagination here (o: This narrows harmonic patterns down to a Bearish Shark of a Bearish Cypher. The cypher should have reversed at the .786, so in my pea brain, this is a Bearish Shark which can land at the .886 or the 1.113 fib levels. This landed at the 1.113.
Since this is a W and not an M, that is the first clue it May (and I stress May) be a bearish pattern in the end. But you can go long on that last W leg if you recognize the pattern. Just be sure to get out at the top of that last leg.
Spinning top right this second as today's candle. The candle may change by close. This is a candle of indecision like a Doji which has practically no body to speak of.
Very long wicked Inverted Hammer 4 trading days ago. An inverted hammer performs at it's best at a level of support and at a bottom, but when this same candle is at the top, it is a shooting star which is bearish and can mean a reversal is looming. The wick must be at least 2 times the length of the body and usually the candle body is small. The color is not so important. At the bottom, or at support, it can show the bears that the bulls can take price higher, even though price does not close at the high. This can make a bear a bit nervous to see how high price traded that session, so they may cover their short if they have enough profit.
The high and low are the same on red and green candles. The top of the upper wick is the high and the bottom of the lower shadow is the low. The open and the close do differ however as a red candle has a close at the bottom and a green candle has a close at the top.
Engulfing candles can also be a reversal candle pattern even if just short term. Opposite colors best and the second candle totally swallows the 1st candle in this pattern.
No recommendation.
Be safe/Laura
XLV appears to have formed a W pattern inside that rectangle that topped out at the 1.113 which caused a throwback and price landed back inside the rectangle. If you take a look at the bottom valleys of the W (almost like a double bottom), valley 2 is slightly lower than valley 1. So, if you flipped this over, it would be peak 1 and peak 2, and peak 2 would be higher than peak 1, but only if you flipped it over. You have to use your imagination here (o: This narrows harmonic patterns down to a Bearish Shark of a Bearish Cypher. The cypher should have reversed at the .786, so in my pea brain, this is a Bearish Shark which can land at the .886 or the 1.113 fib levels. This landed at the 1.113.
Since this is a W and not an M, that is the first clue it May (and I stress May) be a bearish pattern in the end. But you can go long on that last W leg if you recognize the pattern. Just be sure to get out at the top of that last leg.
Spinning top right this second as today's candle. The candle may change by close. This is a candle of indecision like a Doji which has practically no body to speak of.
Very long wicked Inverted Hammer 4 trading days ago. An inverted hammer performs at it's best at a level of support and at a bottom, but when this same candle is at the top, it is a shooting star which is bearish and can mean a reversal is looming. The wick must be at least 2 times the length of the body and usually the candle body is small. The color is not so important. At the bottom, or at support, it can show the bears that the bulls can take price higher, even though price does not close at the high. This can make a bear a bit nervous to see how high price traded that session, so they may cover their short if they have enough profit.
The high and low are the same on red and green candles. The top of the upper wick is the high and the bottom of the lower shadow is the low. The open and the close do differ however as a red candle has a close at the bottom and a green candle has a close at the top.
Engulfing candles can also be a reversal candle pattern even if just short term. Opposite colors best and the second candle totally swallows the 1st candle in this pattern.
No recommendation.
Be safe/Laura
Comment:
Red candles have an open at the top and a close at the bottom. Green candles are opposite and have a close at the top and an open a the bottom which makes more sense to the average thinker like me. The wick/or top shadow is the high of that trading session be it a red or green candle. The bottom shadow is the low on both green and red candles. Candles can tell you a lot about the psychology of the market as do chart patterns. Learning candles can be paramount, because they are not insignificant and a lot of price movement can be guesstimated from candles alone. Price and volume are important as well. The indicators you decide to add can distract you if you add too many. You can experience indicator overload if not careful )o: Be safe not to add 2 indicators that tell you the same thing like RSI and stochastics. You can experience "indicator overload"