{"id":13770,"date":"2015-05-18T05:37:27","date_gmt":"2015-05-18T05:37:27","guid":{"rendered":"http:\/\/researchandinvestment.com\/?p=948"},"modified":"2015-05-18T05:37:27","modified_gmt":"2015-05-18T05:37:27","slug":"long-tailed-candles","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2015\/05\/18\/long-tailed-candles\/","title":{"rendered":"Long-tailed candles"},"content":{"rendered":"

Stocks are recovering from their recent soft patch and breakout above resistance is likely, signaling further gains.<\/p>\n

North American Stocks<\/h3>\n

The S&P 500 is testing medium-term resistance at 2120. Breakout would signal an advance to 2200*. Three weekly candles with long tails reflect medium-term buying pressure, while a 13-week Twiggs Money Flow trough high above zero indicates long-term pressure. Retracement that respects the new support level at 2100 would further strengthen the bull signal.<\/p>\n

\"S&P<\/p>\n

* Target calculation: 2120 + ( 2120 – 2040 ) = 2200<\/p>\n

CBOE Volatility Index (VIX) at 12 indicates low risk typical of a bull market.<\/p>\n

\"S&P<\/p>\n

Dow Jones Industrial Average is testing resistance at 18300. Buying pressure appears similar to the S&P 500 and breakout would offer a target of 19000*.<\/p>\n

\"Dow<\/p>\n

* Target calculation: 18300 + ( 18300 – 17600 ) = 19000<\/p>\n

Canada’s TSX 60 found support at 870. 13-Week Twiggs Momentum holding above zero continues to indicate a primary up-trend. Breakout above 900 would offer a long-term target of 1000*.<\/p>\n

\"TSX<\/p>\n

* Target calculation: 900 + ( 900 – 800 ) = 1000<\/p>\n

Europe<\/h3>\n

Germany’s DAX encountered support above 11000. Penetration of the descending trendline would indicate the correction is over and follow-through above 12000 would suggest a primary advance. Declining 13-week Twiggs Money Flow warns of continued selling pressure and a further test of 11000, but respect of support remains likely and would provide a solid base for further advances.<\/p>\n

\"DAX\"<\/p>\n

The Footsie also displays long tails, suggesting medium-term buying support, but declining 13-week Twiggs Money Flow indicates continued selling pressure. Breach of 6900 would warn of a correction to 6700, but further losses are unlikely at present. Recovery above 7100 would confirm the long-term breakout, offering a target of 8000*.<\/p>\n

\"FTSE<\/p>\n

* Target calculation: 7000 + ( 7000 – 6000 ) = 8000<\/p>\n

Asia<\/h3>\n

The Shanghai Composite is consolidating between 4000 and 4500. Breach of either of these levels would signal future direction. Declining 13-week Twiggs Money Flow warns of medium-term selling pressure, favoring the downside. <\/p>\n

\"Shanghai<\/p>\n

* Target calculation: 3500 + ( 3500 – 2500 ) = 4500<\/p>\n

Short retracement on Japan’s Nikkei 225 Index is a bullish sign. Breakout above 20000 would offer a target of 22000*. Declining 13-week Twiggs Money Flow reflects medium-term selling pressure; recovery above the descending trendline would be a bullish sign.<\/p>\n

\"Nikkei<\/p>\n

* Target calculation: 20000 + ( 20000 – 18000 ) = 22000<\/p>\n

India’s Sensex found support between 26500 and 27000. Long tails suggest medium-term buying pressure. Recovery above 28000 and the descending trendline would suggest another attempt at 30000. But 13-week Twiggs Money Flow remains below zero, warning of (long-term) selling pressure. Another peak below zero would warn of breach of primary support and a reversal.<\/p>\n

\"SENSEX\"<\/p>\n

Australia<\/h3>\n

ASX 200 support at 5750, 5650 or 5550: which is most relevant? Judging by some of the questions received, I succeeded in confusing a number of readers. Here is a brief summary:<\/p>\n