http://www.CandleStickForums.com
Investing in Japanese Recovery
The world is still not over the shock of the terrible earthquake and tsunami that hit Japan recently. However, active investors and traders are already looking at investing in Japanese recovery. Investing in Japanese recovery can take several forms. It could be Forex trading the Yen, which has risen in value as Japanese companies and investors repatriate offshore assets. Investing in Japanese recovery can be done by doing Candlestick analysis on stocks that have seen their stock prices fall dramatically. Many of these companies have no production facilities in the Northeastern area of Japan directly affected by the natural disaster. One might well expect to see those stocks recover to their normal values. The trader who correctly reads market trends and market reversal with a close eye on Candlestick patterns may well profit by investing in Japanese recovery. Long term investing in traditionally strong companies like Toyota and Sony could be profitable if the trader is selling short during a market panic and buying stock at the turnaround. As usual the trader will look for signals such as the Doji Candlestick, which signals market indecision, to light the way.
Investing in Japanese recovery requires that the trader do both fundamental and technical analysis. Regarding fundamental analysis, news reports indicate that the Northeast coast of Japan is not the location of much industry. Thus few stocks will be directly affected by damage to company facilities. However, the damage to nuclear power plants and possibility of radiation leaks, meltdown, and loss of a substantial amount of power in the Japanese power grid could affect many companies distant from the actual earthquake and tsunami damage. In analyzing the fundamentals while investing in Japanese recovery the devil, as usual, is in the details. The problem for the investor who only relies on fundamentals to guide his buying stock, selling stock, trading options, and trading futures is that the fundamentals are rapidly absorbed and discounted by the market. Also, many stock price moves are related to the fundamentals but are more strongly driven by changes in market sentiment. Here is where the time honored use of Candlestick chart formations comes into play.
2. The world is still not over the
shock of the terrible earthquake
and tsunami that hit Japan
recently. However, active investors
and traders are already looking at
investing in Japanese recovery.
Investing in Japanese recovery can
take several forms.
By: www.CandleStickForums.com
3. It could be Forex trading the Yen,
which has risen in value as
Japanese companies and investors
repatriate offshore assets.
Investing in Japanese recovery can
be done by doing Candlestick
analysis on stocks that have seen
their stock prices fall dramatically.
By: www.CandleStickForums.com
4. Many of these companies have no
production facilities in the
Northeastern area of Japan directly
affected by the natural disaster.
One might well expect to see those
stocks recover to their normal
values.
By: www.CandleStickForums.com
5. The trader who correctly reads market
trends and market reversal with a
close eye on Candlestick patterns may
well profit by investing in Japanese
recovery. Long term investing in
traditionally strong companies like
Toyota and Sony could be profitable if
the trader is selling short during a
market panic and buying stock at the
turnaround.
By: www.CandleStickForums.com
6. As usual the trader will look for
signals such as the Doji
Candlestick, which signals market
indecision, to light the way.
By: www.CandleStickForums.com
7. Investing in Japanese recovery
requires that the trader do both
fundamental and technical
analysis. Regarding fundamental
analysis, news reports indicate that
the Northeast coast of Japan is not
the location of much industry.
By: www.CandleStickForums.com
8. Thus few stocks will be directly
affected by damage to company
facilities. However, the damage to
nuclear power plants and possibility of
radiation leaks, meltdown, and loss of
a substantial amount of power in the
Japanese power grid could affect many
companies distant from the actual
earthquake and tsunami damage.
By: www.CandleStickForums.com
9. In analyzing the fundamentals while
investing in Japanese recovery the
devil, as usual, is in the details. The
problem for the investor who only
relies on fundamentals to guide his
buying stock, selling stock, trading
options, and trading futures is that the
fundamentals are rapidly absorbed
and discounted by the market.
By: www.CandleStickForums.com
10. Also, many stock price moves are
related to the fundamentals but
are more strongly driven by
changes in market sentiment. Here
is where the time honored use of
Candlestick chart formations
comes into play.
By: www.CandleStickForums.com
11. Technical analysis with Candlestick
pattern formations can help those
investing in Japanese recovery by
alerting the trader to changes in
market sentiment. When the
earthquake hit, followed by the
tsunami it took untold thousands of
lives. The ensuing market panic
spread across the globe.
By: www.CandleStickForums.com
12. Many anticipated an even worse
scenario than what is currency known
to be the case. In such moments of
trading psychology fear is a major
factor. Having a sense of whether fear
is still driving such a market or if a
market is ready to turn around as
traders collect their wits can be
extremely profitable.
By: www.CandleStickForums.com
13. We mentioned the Dojo
Candlestick previously. The Doji is
a candlestick that is squashed flat.
That is to say the opening and
closing stock prices are virtually
equal. The shadows may extend far
above and below the body of the
candle.
By: www.CandleStickForums.com
14. If that is the case the market is
very indecisive. When this
Candlestick occurs on Candlestick
charts that have been trending up
or down it signals the strong
likelihood of a reversal in stock
price.
By: www.CandleStickForums.com
15. In the case of falling Japanese
stocks after the natural disaster it
can be a sign that traders are
collecting themselves and thinking
critically about the ability of the
Japanese economy and the
Japanese people to pick themselves
up and rebuild.
By: www.CandleStickForums.com
16. However, the trader does not need
to interpret. He only needs to
trade according to his Candlestick
charts and Candlestick trading
tactics in order to improve his
chances of making profits from
investing in Japanese recovery.
By: www.CandleStickForums.com
