Technical Analysis | Stock Market Timing Signals | Top Stock Picks

Typically, doji candlesticks can indicate a weakening of the current trend.  Viewed in that light, today’s action should be taken as a cautionary signal but not a definite turn in the trend – especially because the longer trend is still up.

Let’s take a look at the longer term time frames in order to create a more comprehensive technical analysis from which to glean some market timing signals.

On the weekly stock chart, prices are continuing their move up from the support & resistance level of 11,250.  A few more moves up in stock prices have the possibility of really igniting a solid rally that could potentially reach the next overhead resistance level at 12,000. 

The weekly price momentum indicator has increased to a level of 106.54 while stock prices have moved solidly away from the PSAR relative price indicator.

On the daily chart you can clearly see how today’s stock market action has created the doji candlestick.  The price momentum indicator is heading upwards and is now at 94.87.  Today’s action was the follow-up day to the PSAR switch that occurred on Tuesday.

A price move above the 11,311.55 index level would be bullish for the market.

This PSAR switch when combined with the weekly status caused us to move into the market with our model portfolio today.  See today’s top stock picks email for more details on the model portfolio transactions.

On the hourly chart prices moved up briskly from the open, fell back, then spent the balance of the day right around even.  The last hour of trading saw a boost in stock prices that may flow over into tomorrows trading.

Trading Strategy:

Given the market internal action it appears safe to consider new positions in strong stocks that are moving up on days that the broad market is also moving up.