Gapping & Yapping has been preaching the gospel of Jay Crew for several weeks now. Lets take a look at the chart.
JCG is in a confirmed downtrend, but is showing signs of trying to buck the trend. Today’s move on volume found the stock stuck just beneath the 50 day average and the downtrend line, and several points beneath the 200 day moving average. With the RSI(2) near overbought, and longterm resistance just overhead, it may be prudent to be cautious at this critical junction. However, both the MACD and Stochastics have room to move up, and so should the price.
 Should JCG over take the 50 day average and the downtrend line, it would represent a significant change in the trend. It seems the bet here is that the trend is changing. If that is true, then $34 should definitely not be breached.
Woody,
Not sure if you read the candles at all, but if so, are there any stats re the reliability of an abandoned baby formation ….. does it prove to be correct a high percentage of the time?
I’m looking at an oil related stock and with the consolidation there I’m somewhat reluctant to jump on though the money flow, sto and macd look good and it’s just below it’s 200/100/50 dma …. can the candle be relied on?
One thing I see different this time is the volume. This much volume has not occurred the past few times it has tested the 50 day and I believe the buyers could be serious this time. I do agree to proceed with caution here. I think should it break over the 50 day we could see a big squeeze as short interest is high in this name. Thanks Wood for all of the work!
I do read the candles. I’ve read some stats regarding well-known formations, i.e., dark cloud cover, and others, and what I remember is there was no statistical significance found in the testing. Now that does not mean crap really, as I can’t remember the actual parameters. It may be that if the time frames and other variables were changed, that the results would have been more positive. I bet some google diligence will uncover some candle testing. It may have been in TA of SC mag.
My personal experience is that the abandoned baby can lead to some quick profits on the short side. Its not something I’d want to stay short longer than a few days as typically stocks making abandoned babies have previously been very strong, and I prefer shorting weak stocks.
No problem gapping. I agree with your assessment.
Spit on a few low wage clerks for me next time you pass the CME and we’ll call it even.
This is like a morning star but with a doji and suppose to be a bullish reversal of a down trend (oil svc) and hence my reluctance to hop on board …
http://candlestickgenius.com/candlestick_patterns.html#highprob
This is like a morning star but with a doji and suppose to be a bullish reversal of a down trend (oil svc) ….
http://candlestickgenius.com/candlestick_patterns.html#highprob
Sorry …. got that double post message and revised …. must have double clicked like an asshat!
8- on the link you gave, I’ve only traded the bearish version, when it appears at a top, a few times.
I know a lot of testing I’ve done for 200 day bounces shows that the doji, similar to the AB, is very powerful when combined with volume and some sort of support to bounce from.
Thanks …. I think it would be more bullish had todays’ white candle been longer …. volume was good but the candle was the size of a star due to the tight trading range (1 1/2 pts) …. guess I’ll watch it a little more before committing.
Yes, if you are talking about the OIH, a longer tail would have been nice, kind of like the low candle made in August. Although it does look like it is worth watching as a setup.
Actually it’s one of the components …. don’t want to name it until I buy with so many traders on the Fly’s site ….
JCG is run by a genius.
Great company.
Great call Fly …. you win again!!!
Eddie Lampert should hire him ….
Hey, this was a great post. Really informative. I bookmarked it, and will definitely be coming back. 😀