Day 15 of Investing on the Side

We can see how the period between October to December 2018 was the original bottoming of this chart. But it was complicated. At first glance, it’s an easy tell: volume surged the lower shadows tell us that the bulls were starting to come into the trade. 

The large bearish engulfing candle casts doubt on the movement
The large bearish engulfing candle casts doubt on the movement

The complication was the large bearish engulfing candlestick at the beginning of December, which cast doubt on the whole bullish movement, which was starting to take place. Our suspicion is warranted, as price does reverse back to the downside, and briefly falls to lower lows. Scary if you had bought into the bullish storyline.  

Has the bearish momentum gained? We start to see a break of the original support level
Has the bearish momentum gained? We start to see a break of the original support level

When would we have started to see a bullish movement begin to take place? For me, it would have been the initial break of the mini-resistance, the high the original bearish engulfing candlestick. 

The original bullish breakout was weak!
The original bullish breakout was weak!

And even though we see the breakout of this resistance, the confidence of the breakout is worrisome. Also, the breakout was on a bullish candlestick, the sizeable upper shadow suggesting a weak follow-through – not something we want to see on a breakout! 

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