The OBV marginally broke its support, line b, several weeks before the doji was formed.
The yearly chart shows that a doji was formed, which is a sign of indecision.
For those selling short based on this trigger, a stop is placed above the doji or most recent high.
In 2011, the yearly close was flat forming a doji, but it did make higher high for the year.
It could use a well deserved break, and the doji candlestick put in on Friday might lead to that rest.
In this second chart, I have included the monthly OBV with its 21-month WMA. I have highlighted the doji at point 1.
The OBV stayed above its WMA until the week ending May 18, and in this instance, was not helpful in confirming the doji.
When the close of the next candle is below the low of the doji, then a low close doji signal (LCD) is triggered.
Chart Analysis: The weekly chart of the Dow Jones Transports shows that the week after the doji was formed, the Transports dropped 3.7%.
One week after the highs, the Dax formed a doji (point 1), and the following week triggered a low close doji (LCD).
Chart Analysis : The Select Sector SPDR Consumer Discretionary ( XLY) had a very tight range last week as it formed a doji.
Most indices produced some type of doji or hammer bar to give active traders a signal that some type of rest is due.
The formation of the doji was accompanied by the formation of a negative divergence in the OBV, line a, as it made significantly lower highs.
The fact that the weekly OBV had just moved above its WMA as the doji was forming might have kept you out of the trade.
The daily OBV also did not form any divergences but a daily doji was formed on September 20 and AAPL closed below the doji low two days later.
By looking at the Starc bands, as well as the doji (a sign of indecision), traders might have avoided jumping in on the long side at that time.
This monthly chart of the Dow Industrials shows that a doji (see circle) was formed in October 2007 as the Dow opened at 13, 895, had a low of 13, 407, and closed at 13, 930.
It typically is interpreted as a sign of indecision but then John Person shared with me his high and low close doji triggers, which are in his book Candlestick and Pivot Point Trading Triggers.
The daily chart shows that a doji candle formed at the August 17 lows (see arrow), and just a few days after those lows, the daily RSI was back above its weighted moving average.
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