Japanese Candlestick Charting Techniques: A Contemporary Guide to the Ancient Investment Techniques of the Far East,Second Edition by Steve Nison

Author:Steve Nison [Nison, Steve]
Language: eng
Format: azw3
ISBN: 9781101659786
Publisher: Penguin Publishing Group
Published: 2001-11-01T05:00:00+00:00

EXHIBIT 7.20. Platinum—Daily (Upgap Side-by-Side White Lines)

Because this chart has many examples of windows, I will discuss them individually.

A falling window at 1 keeps the trend down. This is in spite of the fact that it was a hammer on March 26. Usually, between the window and another pattern, I go with the window. In this case, it was between a bullish hammer and a bearish falling window. The bearish outlook engendered by the falling window takes precedence over the hammer. It would take a close above the window to have the bullish outlook hinted at by the hammer to be validated.

The small rising window at 2 became support on the minor retracement from the dark-cloud cover of April 4 and 5. The doji on April 10 (at the window’s support) showed two things. The first was that the window at 2 held as support. The second was that the stock was separating from its prior downtrend that was evidenced by the three consecutive black real bodies before the doji.

The rally that started with the successful defense of window 2 on April 10 stalled on April 23 as Platinum got to the resistance area at $495 defined by the top of falling window 1. The decline from this resistance opened a falling window at 3. The long black real body on April 25 followed by a small real body inside that black real body formed a harami pattern. This showed that the bears were losing their momentum.

The rising window on May 1 followed by the two small white real bodies. (This formed the aforementioned upward gapping side-by-side white candle line pattern.)

After the upgap side-by-side white lines, it became a battle of windows with the falling window at 3 as resistance (near $488) and rising window at 4 near $475 as support. We can see that for over a week the aforementioned support and resistance areas held intact until April 17 when the demand was strong enough to push the market over the falling window 3’s resistance on a close. (On April 14 the market pushed over the window intraday but did not close above it—thus keeping the window’s resistance intact.) From the break of that resistance, the market ascended briskly until a harami pattern on May 18 and 21 called an end to that rally.

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