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Step 1 -
Pull up a Weekly chart of the stock.
Step 2- Look
for a BULLISH HARAMI resting on MINOR PRICE SUPPORT,
and/or a rising Major Moving Average (10 MA, 20 MA, or 50 MA)
on the Weekly chart.
Step 3 -
Pull up a Daily chart of the stock. Note that
the Harami pattern formed on the Weekly chart is made
up of 5 individual daily candlesticks.
Step 4 -
Look for consolidation of the last 3 or 4 daily
candlesticks at the high price of the
week. This consolidation line
represents an area where the stock takes a rest before
resuming it's uptrend. The objective is to
enter the stock just before the next big upward move.
Step 5 - Enter
the stock only if it breaks 1/8th above the area of
consolidation line. This will often correspond to the
high price of the week. If the stock does
not break through the area of consolidation, DO NOT
ENTER THE TRADE.
Step 6 - Mark
off the 50% retracement line. This will be the halfway
point between the line of support where the stock
began it's rally, and the line of resistance where the
stock made it's last major pull-back.
Step 7 - After
entry, place
an initial protective stop 1/8th below the low
price of the previous day's candlestick.
Sell the stock immediately if the stock breaks below this price.
Step 8 - On
each new day, adjust the trailing protective stop to 1/8th
below the previous day's candlestick's low price.
Continue to use a trailing stop as long as the stock
remains below the 50% retracement line.
Step 9 -
After the stock has broken above the 50% retracement
line, look for a reversal candlestick. This will
most likely be a bearish candlestick which closes near
it's low price of the day. Sell the stock for
profit either before the market close, or at the
market open the next day.
If you have any questions regarding this report or the CANDLESTICKSHOP.COM
website in general, please do not hesitate to contact the author at info@candlestickshop.com
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