Trader's Logbook

EDC made a good opening last Monday and continued the ascend on Tuesday but seems a correction might be felt in the coming days as we see an Engulfing Pattern on today’s chart. Will it dip to close the gap made last Monday?

Engulfing Pattern needs two candlesticks where the first candlestick is a small green followed by a larger red candlestick that engulfs the green one. The market is in a bull mood and then we see a diminishing buying spree as depicted by the short, green real body. Then it is followed by a selling pressure which lead to a close at or below the previous day’s open. At this point it looks like the bears have the control. But Engulfing Pattern has a medium reliability so we need to see a confirmation by way of a red candlestick, a large gap down or lower close.

Caveat!