Courtesy of Market Tamer
- The Doji occurs when the stock opens and closes at the same level.
- It is an indication of major indecision in investment sentiment.
- It is important that we interpret the Doji in the context of the market.
- The Doji is a single candlestick pattern and is extremely powerful in foretelling a reversal.
- There are many variations of the Doji- The Doji Star, The Long Legged or High Wave Doji, The Gravestone Doji and The Dragonfly Doji. Each has a slightly different story to tell.
- The primary message that the Doji sends is that there is a "Tug Of War" going on between the bulls and the bears.
- When found at the top of a trend, it may be prudent to sell if you are long the market.
- Dojis at the bottom of the trend although very significant require more confirmation for a reversal.
- Dojis found in a sideways channel are not very significant
- The market will not always reverse immediately after a Doji, but many times the reversal will occur very shortly thereafter.
- Dojis specifically and Candlesticks in general are extremely powerful when used in conjunction with other technical indicators that confirm resistance and support.
Where is the Market Headed?
Dow
S&P 500
Nasdaq
