You’ve probably noticed those funny shaped blocks that represent price history on most of the stock charts I share here.
Believe it or not, these blocks, or candlesticks, can actually tell you a lot about the price movement and buyer/seller tug-of-war within the market.
Without trying to get too detailed, the basic use behind a candlestick is to let you know whether buyers or sellers are more aggressive during a particular market day. As with typical technical analysis, a combination of various candlesticks and formations can help us forecast future price movement.
Earlier this week a negative bearish engulfing line (candlestick) was spotted in the Nasdaq. The last time this happened the market dropped about 300 points.
A great video has been put together, to help learn more about this particular candlestick and how it can be used. Watch the full video here.
