Shaven head white candlestick for the TSX

Candlestick Charts: Shaven head candlestick or the TSX

TSX Daily Candlestick Chart - Feb 1, 2011

Technical analysis, using candlestick charts, allows you to gain a quick snapshot of the price action without bogging down in the details.

Today (Tuesday), the TSX opened above Monday’s close and high for that day. The high is indicated by the shadow on Monday’s candlestick.  So, we had a very nice opening to start Tuesday trading: the opening is the rudder for the trading day.

Then the market continued to trade higher and closed at 13,712 which was very close to the high of 13,714. Anytime a stock or index closes near the high of the day, that is a very good closing. It is called a shaven head white candlestick because there is no shadow.

Another important principle to discuss regarding technical analysis is the reversal of resistance to support.  Yes, when resistance is penetrated with a close above that level, that resistance level (13,500) reverses rolls and now becomes support.

Reference the full sized 6-month Bigchart for the TSX,

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