?, page-19

re: ? nab harami cross prev exampe It is interesting how the candlestick charting method seems to assign a higher probability to a trend reversal in NAB right now when compared to other charting methods. As mentioned the candlestick method illustrates the harami cross - a mildly bullish reversal indicator.
However, if you used a OHLC Bar Chart NAB would have exhibited an "inside day" and little more. Inside days of course are indicative of a weakness in the trend only - they are by no means a reversal indicator. Inside days show a temporary stalemate in the market, with neither side driving the action.

A much more reliable OHLC bar chart reversal indicator would be a "key reversal" which often occurs in the banks when they they have finished sharp and sustained downtrends.
ANZ exhibited a massive "key reversal" in November 2003 after the rights issue completed.
NAB's last decent key reversal was in September 2001 at around $24.00 which signalled the end of that particular downtrend. The candlestick equivalent of the "key reversal" is of course the "engulfing candle".

I don't think anyone would say NAB is completely out of trouble with today's bullish harami cross. However, it may be the best we get. Could be a quick, high risk trade if it opens higher tommorrow.

Having said that, I'm neither rich nor ballsy enough to go long just yet!!



Cheers,


Christian