US stock market gained 2% yesterday and bullish candlestick patterns appeared in several stock charts. Instead of scanning one after another, I created a custom indicator in NinjaTrader charting software which scans SP500 and Nasdaq stock graphs for a specific candlestick pattern, that consists of 3 candlesticks. The first is a falling candlestick followed by a candlestick with a lower low and lower close, and the final candlestick is a rebound climbing candlestick with higher open, close and high than the first candlestick. That particular candlestick formation is considered one of the strongest bullish pattern, especially if it is accompanied by volume increase or occurs at a support level.
There a couple of more indicators taken into consideration when I am prompted with the scan’s result, which are RSI being lower than 50 – so the stock is not overbought – and ATR lower than 20% of the stock’s price – resulting in a stock that is about to enter a trend, hopefully a long one while being able to set a stop loss close to the previous low. The daily charts that show that kind of a bullish candlestick pattern are those of the following stocks:
HBAN, AMD, LSI, PHM, KEY, STM, KLIC, XRX, SKS, FITB, MWW, TER, SAPE, TTWO, EWT, STLD, FCS, IM, LEN, EWH, TE, SYMC, JBL, PFE, HOLX, PGR, TXT, CA, PBI, LEG, HGSI, CMCSK, CMCSA, USB, EWA, CSX, CVC, MO, EMC, CFN, CCE, ADBE, FIS, RSG, TXN, SYY, NUVA, ABV, ORCL, SMH, WYN, XLNX, CCL, HPW, ADI, MCO, XLI, CSC, CVS, RAI, NETL, DNDN, FXI, EPP, VWO, PCAR, BMC, TOT, AMGN, HOT, HON, SAP, SYK, COST, MTB and BHP.
Oracle Corporation (NASDAQ:ORCL) is a stock that should definitely be in a long-term position trader’s watchlist, as the stock is trending for many years and this bullish formation might just be enough to initiate a trade. Although in the weekly chart the stock failed to reach new highs the past month and there is MACD divergence, the strong uptrend and new highs in July could suggest a 10% probable gain during the following days.
Comcast Corporation (NASDAQ:CMCSA) is a stock for short-term traders who are looking to bank profits during the next couple of days. Setting a tight stop loss at $24 and going for $26 as the profit target would make a 1-3 risk-reward ratio trade and we only need to be correct 26% or more to make money.
Symantec Corporation (NASDAQ:SYMC) did not only gain 3.15% yesterday, but the candlestick’s high overcame the high of the last 3 candlesticks, indicating an even stronger move. I wouldn’t be surprised if SYMC stock goes for new 2-year highs in the following weeks.