nice close augurs well for tomorrow, page-2

Volume is decreasing an the SP is holding steady the last few days around the 8-9c mark. Today's chart shows a doji star.



BULLISH (DOJI) STAR
Type: Reversal
Relevance: Bullish
Prior Trend: Bearish
Reliability: Medium
Confirmation: Suggested
No. of Sticks: 2

Definition:
Bullish (Doji) Star Pattern is a short candlestick, a spinning top, a highwave or a doji, which gaps from a long black candlestick during a downtrend.

Recognition Criteria:
1. Market is characterized by downtrend.
2. We see a long black candlestick on the first day.
3. Then we see a short candlestick, a spinning top, a highwave or a doji, that gaps in the direction of the previous trend on second day.
4. The shadows of this short candlestick, spinning top, highwave or doji are not long.

Explanation:
Usually a star that follows a long black candlestick in a downtrend indicates a change in the market environment. Bears were in control during the downtrend but now a change is implied by the appearance of a star that shows that the bulls and the bears are in equilibrium. The downward energy is dissipating. Things are not favorable for continuation of a bear market.

Important Factors:
A confirmation of the reversal on the third day is required. This confirmation of the trend reversal may be in the form of a white candlestick, a large gap up or a higher close on the next trading day (third day).

Fingers crossed for a good Dow performance which will give confirmation and a new upward trend. If this happens we will see an Abandoned Baby or Morning Doji Star pattern. This would fit well into the cup and handle type pattern which would set itself up for a retest of the 12c resistance.