I bet very few people would have noticed that Liz - I'm impressed!
The latest candle on this chart is a "Dark Cloud Cover". These are a Bearish reversal pattern and are identified by :-
(1) Being preceded by a candle with a strong white body.
(2) Opening above the previous candles High.
(3) Closing deeply within the previous candles body.
The greater the degree of penetration into the white body, the higher the likelihood that this is a top. If the black candle does not close below the midpoint of the white candlestick body (marked by blue arrow) it is best to wait for more bearish confirmation following the Dark Cloud Cover.
The lower sensitivity of longer-term systems such as this is the desired quality that stops longer-term traders being flicked out by small adverse price movements. The downside is that signals, when they do come, are late. This is nicely illustrated by the trendline-break of a daily data plot, as below. Such a signal gave a much more timely exit than any derived from longer-term candlestick patterns.
Note that despite the trendline break, ETC is still in a three month uptrend. While this latest candle is definitely Bearish, it nevertheless does have a higher high and a higher low than the preceding candle and so, technically, the uptrend is still intact. On this basis, longterm investors in ETC might well continue to hold, but not many traders would have ignored the sell signals illustrated here.
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