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Bullish Harami

Zen sees possible “real” bullish harami in $DUST

Apparently, the bullish harami continuation pattern on my $NUGT wasn’t doing too well today.  I gave back all paper gain from yesterday and took a tiny losses for the work.  I also took a small losses on $ABX as well.

Not to be discouraged, $DUST now shows a possible bullish harami “at the bottom” of the trend with supports on the two moving averages lines.  Of course, the bullish harami will have to be confirmed tomorrow with price action taking out today close.

DUST_daily

I bought $DUST this morning looking to see if this bet will pay off tomorrow.

My 2 cents.

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Zen sees bullish Harami continuation pattern for golden $NUGT

Usually, a bullish Harami happens at the bottom of the trend to signify a bullish reversal.  In this case, a breakout of the Friday inside bar to the upside that takes out the previous high two trading days ago reflects a bullish continuation pattern.  Since it has taken out the inside bar from Friday, I will call the candlestick pattern “the bullish Harami continuation pattern”.   Don’t bother to google it; there is no such thing.  I just make it up.  Whatever works for me, eh? (grin).

Take a look at the daily chart below.  I believe gold minings and gold is heading up.

NUGT_daily

I like to see price action takes out the recent pivot high at $13.54 established in May 9th.

Yes, I bought back $NUGT and $ABX this morning.

My 2 cents.

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Coming back to the old guard

Remember $CTSH?

$CTSH had a monster run from a low $14 to $83 from late 2008 to early 2011 before it started having hiccup over the next two years.  I believe the current hiccup has come to a conclusion and price may just be heading back up soon.

Take a look at the weekly chart below:

CTSH_weekly2

Take a close look at the weekly chart again:

CTSH_weekly

As you can see, this week may confirm the Bullish Harami weekly candlestick pattern for a bullish reversal.  Momentum indicators are also coming back up from the low point.

Take a look at the daily chart below:

CTSH_daily

Price took off after positive earnings report and the momentum may continue with the 5 ma line crossed over the 15 ma line today.

My 2 cents.

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Bullish Harami = odd of going back up is good

We have a really nice Bullish Harami under development in the daily $SPY chart.  And the nice thing about this is that the price action is now on top of the 2007 support.

Take a look at the chart below:

SPY_Daily

Did you notice that despite yesterday big down day, it hasn’t penetrated the up trendline on the chart.

Although market is up $126 point right now, I’m sensing quietness and calmness.  Thus, I haven’t been active at all today.

Below is some primer on Bullish Harami:

Source: click here

Bullish Harami

The bullish harami is made up of two candlesticks. The first has a large body and the second a small body that is totally encompassed by the first. There are four possible combinations: white/white, white/black, black/white and black/black. Whether they are bullish reversal or bearish reversal patterns, all harami look the same. Their bullish or bearish nature depends on the preceding trend. Harami are considered potential bullish reversals after a decline and potential bearish reversals after an advance. No matter what the color of the first candlestick, the smaller the body of the second candlestick is, the more likely the reversal. If the small candlestick is a doji, the chances of a reversal increase.

Harami Candlestick example from StockCharts.com

In his book Beyond Candlesticks, Steve Nison asserts that any combination of colors can form a harami, but that the most bullish are those that form with a white/black or white/white combination. Because the first candlestick has a large body, it implies that the bullish reversal pattern would be stronger if this body were white. The long white candlestick shows a sudden and sustained resurgence of buying pressure. The small candlestick afterwards indicates consolidation. White/white and white/black bullish harami are likely to occur less often than black/black or black/white.

After a decline, a black/black or black/white combination can still be regarded as a bullish harami. The first long black candlestick signals that significant selling pressure remains and could indicate capitulation. The small candlestick immediately following forms with a gap up on the open, indicating a sudden increase in buying pressure and potential reversal.

Micromuse, Inc. (MUSE) Candlestick Harami example chart from StockCharts.com

Micromuse (MUSE)[Muse] declined to the mid sixties in Apr-00 and began to trade in a range bound by 33 and 50 over the next few weeks. After a 6-day decline back to support in late May, a bullish harami (red oval) formed. The first day formed a long white candlestick, and the second a small black candlestick that could be classified as a doji. The next day’s advance provided bullish confirmation and the stock subsequently rose to around 75.

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My 2 cents

 

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