StockCharts Blogs - Don't Ignore This Chart!

QQQQ Turns Indecisive at Support

After a sharp decline the prior two weeks, the Nasdaq 100 ETF (QQQQ) turned indecisive with a spinning top on Monday. This candlestick reflects a wide high-low range during the day, but little change from open to close. QQQQ surged above 41.5 in early trading, plunged below 40.8 in the early afternoon and then rebounded to close at 41.13. The day was a wash and the battle for support hangs in the balance.

Click this chart for details.

Anatomy of a Doji (STAA)

STAA put in a huge Doji on its daily chart today.  Technically, a doji is a candlestick where the open and the close are the same.  The huge upper shadow and relatively small lower candle makes STAA's Doji especially striking.  It is very close to being a "Gravestone Doji" - a doji with a big upper shadow and no lower shadow.

Doji's often signal a reversal.  We can see the reason for that by looking at the 10-min intraday chart for STAA:

STAA gapped up on the open and then quickly rose to its high for the day (2.74).  It then spent the rest of the day slumping back to its opening price.   By 3:30, it had moved below the open to the low of the day - 2.00.  A late day buy order brought prices back up the opening level - 2.04.

As we can see on the intraday chart, the quick move up followed by a lack of follow thru had two consequences - 1.) it probably depressed the STAA bulls and 2.) it created the big doji on the daily chart.  Which is why dojis often indicate reversals.

Dark Cloud Cover for ODFL

(Click here to see a live version of this chart.)

The Dark Cloud Cover candlestick pattern occurs when a stock that is in an uptrend has a tall hollow candle that is followed by a tall filled candle that extends below the mid-point of the first candle.

A Dark Cloud Cover pattern signals short-term weakness for the stock.  The idea is that investors who were excited by Thursday's big rise are now disheartened by today's lack of follow through - thus making another rally unlikely in the near term.