Trader's Logbook

FDC made multiple rallies giving last week a total of 13% gain to holders. But will it continue this week or bears will soon appear and change the mood? Last Friday we saw an Engulfing pattern which could mean the current trend may reverse. This pattern is compose of a small green candlestick followed by red candlestick that is larger than the previous and that it engulfs it. Market is in a bull mood. Then we see diminished buying reflected by the short, green real body. This then is followed by a sell-off, which lead to a close at or below the previous day’s open. This shows that the uptrend is losing its momentum and bears may soon overcome the bulls.

With a medium reliability, this pattern needs a confirmation on the next trading day by way of a gap down, large red candlestick or a lower close.

Caveat!