Bullish white candlestick closes at 13,551

TSX daily candlestick chart for Monday, January 31, 2011

TSX Daily Candlestick Chart

This was a break above resistance at 13,500.

Today’s chart snippet for the Toronto Stock Exchange S&P/TSX Composite Index shows the bullish white candlestick which closed at 13,551.  This was a close above the resistance level of 13,500.  View the  this full size customized chart which is provided by BigCharts.

Now, for the rally to continue, the tsx should open at or above the close of today and end higher tomorrow: in other words, another white candlestick. Bulls like tall white candlesticks with small shadows or none at all.

Talking about shadows, a candlestick with no lower shadow is said to have a shaven bottom. And you guessed it, a candlestick with no upper shadow is said to have a shaven head.  In a white candlestick, this is a very bullish pattern depending on the height. And in  a dark candlestick,  it is considered very negative.

All the market news is reflected in today’s candlestick: Egyptian protests, price of crude, copper at a all time high and the list goes on.  How the market indexes or individual equities react to both good and bad news is an important observation in technical analysis.  One guideline, if a stock does not sell-off on bad news then it is going up.

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