Price Direction 3rd September 2008

Update: Price Reversal Failed.. In day-three the candle failed to holds above day-twos body

Price membuat strong bearish trending wave last week; semalam price telah menunjukkan tanda sideways untuk small timeframes;

Daily candle end dengan Inverted Hammer; Weak bullish price reversal near my watch support level 192.60...

What is Inverted Hammer?

• Day-one is a red day, continuing an established trend and closing at the lower trading range near the days low
• The second day is red or blue day that also trades at a lower range with the opening and closing near each other.
• The upper wick of the second day should be at least twice as long as the body
• The lower wick of the second day should be non-existent or very little.

The Inverted Hammer appears in a market that opens at or near its low, creating a candle with a small real body. During the day buyers rallied price fairly high, but were unable to sustain the rally.

• Psychology and Confirmation Signals for Bullish Inverted Hammer

In a market characterized by downtrend, bulls are able to rally price up briefly, but not enough to close above the days open. This can be a warning for shorts to anticipate a further, more sustainable bullish rally. The reversal trend is confirmed by bullish moves the next day.

In day-three the higher the candle holds above day-twos body, the more likely the shorts will cover their positions, hence leading to the weakening of a bearish market. Many bottom pickers will start longing the market once that occurs, leading to a bullish reversal. Confirmation for the Inverted Hammer pattern is strongly suggested for this pattern.

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