Yule Logs and Gravestone Dojis
- Posted by Greg Harmon
- on December 24th, 2012
Ever wonder about the potential of a Gravestone Doji? That Japanese candlestick pattern that runs much higher off of the open, typically a higher open and often a gap, and then falls back to close unchanged. Aptly named, connoting death, it looks like an antenna, but of course those did not exist in 17th century Japan, the roots of candlestick patterns. Gravestone Dojis, as their name suggests, are a reversal signal in an uptrending market. Like most patterns they need to be confirmed by a lower close before trading off of the information, but once they do they can be powerful. One stock Greenbrier, $GBX, has a PhD in Gravestone Doji lately. The chart above highlights the December 19th Gravestone Doji and also one on September 14th. Look at the
reaction both times, drops of over 22%. But there were signs that a reversal may occur even without being a student of Japanese candlestick techniques. Each time the reversal happened at the top of the rising channel after a day with stronger than normal buying volume and with the relative Strength Index (RSI) in overbought territory. So are you looking for Gravestone Dojis yet?
Join the Dragonfly Capital Views Premium Membership
Sign up here to get deeper analysis and nearly 50 trade ideas every week.
If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
- SPY Trends and Influencers January 31, 2015
- Macro Week in Review/Preview January 30, 2015
- Premium Earnings 1-30-15
- The Longer Outlook in ….. The Euro
- Stella, Hey Stella, Grab Me a Stella Artois
- Premium Earnings 1-29-15
- The Longer Outlook in ….. Gold
- Papa John’s Is Prepping for a Super Bowl Break Out
- Premium Earnings 1-28-15
- The Longer Outlook in ….. Crude Oil