JWBK100-IND.qxd 2/21/08 9:07 AM Page 253 epg WILEY:JOBS:Wiley_PT:Logan:JWBK100_QXD%:Printer File:JW Index Advanced Micro Devices (AMD), 147 Bear market, 133 Advent Software Inc. (ADVS), Bears, 9 101, 102 Berry Petroleum Co. (BRY), 177, 178 Amateur hour, 14 Beta, 110 AMB Property Corp. (AMB), 186 Biolase Technology Inc. (BLTI), 168 American Stock Exchange (AMEX), Biomarin Pharmaceuticals (BMRN), 201 59 Area gap, 153 Blow-off top, 49 Arithmetic scale, 111, 113 Body gap, 162 Autozone Inc. (AZO), 33 Bollinger, John, 103, 109 Average, 116–117 Bollinger Bands, 109 Average daily volume, 101–102 Bollinger on Bollinger Bands (Bollinger), 103 Bar, 8 Bollinger squeeze, 109 Bar chart, 5, 8 Bolt Technology Corp. (BTJ), 57–58 Bar graph, 102–103 Bottom, 118–119. See also peaks and Basing action, 136 bottoms Bearish (black) candle, 12 Box range, 136 Bearish engulfing pattern, 56–58, 60, Breakaway gap, 153, 154 236 Breakdown, 175 Bearish harami, 62–63, 236 Break of resistance, 176 Bearish harami cross, 62, 236 Break of support, 175 Bearish reversal patterns, quick Breakout, 176 reference, 235–236 Broad market environment, 83 bearish engulfing,COPYRIGHTED 236 Bulkowski, MATERIAL Thomas, 107 bearish harami, 236 Bullish (white) candle, 12 dark cloud cover, 236 Bullish engulfing pattern, 58–59, 237 doji (northern), 235–236 Bullish harami, 63–64, 237 evening star, 236 Bullish harami cross, 63 hanging man, 235 Bullish reversal patterns, quick shooting star, 235 reference, 237–238 Bearish shadows, 91, 92 bullish engulfing, 237 Bearish star, 18, 66, 67 bullish harami, 238 253 JWBK100-IND.qxd 2/21/08 9:07 AM Page 254 epg WILEY:JOBS:Wiley_PT:Logan:JWBK100_QXD%:Printer File:JW 254 INDEX doji (southern), 237 psychology of, 86–89 hammer, 237 trading opportunities and, 201–207 inverted hammer, 237 Candlesticks, 8 morning star, 238 Capitulation, 17 piercing pattern, 237 Catching air, 136 Bullish shadows, 91–92 Chart analysis practice sets, 220–231 Bullish star, 66–67 Chart patterns, 8 Bull market, 133 Checkpoint Systems Inc. (CKP), correction, 133 158–159 Bulls, 9 Clarcor Inc. (CLC), 171 Closing Price, 14–15, 24 Cal Dive International Inc. (DVR), Coding the candlestick patterns, 137–140 202–203 Calgon Carbon Corp. (CCC), Coherent Inc. (COHR), 95 104–105 Cohu Inc. (COHU), 149 Canadian National Railway (CNI), Common gap, 153 156 Common reversal patterns, 28–30 Candles, 8 nonideal patterns and variations, 30 Candlestick charting pattern format, 29 evolution of, 3–5 Computerized screening, 201–202 introduction to, 3–9 limitations of, 206–207 limitations of, 6–7 ConocoPhillips (COP), 69, 70 strengths of, 5–6 Consolidation, 79–81, 125 time frames, 25–26 Continental Airlines (CAL), Candlestick Charting Explained 107–108 (Morris), 28 Continuation gap, 153, 154 Candlestick lines, 27 Convergence of signals, 211 constructing, 11–26 Con-Way Inc. (CNW), 93–94 evolve throughout session, 22–25 Copart Inc. (CPRT), 69, 70 high-wave candles, 21–22 Corn Products International Inc. long candles, 16–18 (CPO), 62–63 shaven candles, 18–19 Countertrend, 132 short candles, 18 Cover (buy-to-cover), 35 spinning tops, 19–22 Covering, 214 Candlestick reversal patterns, 27–77 Crane Co. (CR), 183–184 at support-resistance, 195–197 Candlestick reversal patterns, using, Daily bar, 24–25 199–216 Daily candlestick line, 24–25 providing warnings, 213 Daily chart, 8 recognizing candlestick patterns, Dark cloud cover, 48–52, 236 199–200 pattern description and criteria, reinforcing other set-ups, 210–213 48–49 JWBK100-IND.qxd 2/21/08 9:07 AM Page 255 epg WILEY:JOBS:Wiley_PT:Logan:JWBK100_QXD%:Printer File:JW INDEX 255 Denbury Resources Ltd. (DNR), Enhanced candlestick signals, 147–149 169–170 eSignal, 200 Dip, 136 Estee Lauder Companies Inc. (EL), Directional move, 19 184–185 Divergence, 106–107 Evening doji star, 68, 69 negative, 106 Evening star, 20, 68–72, 236 positive, 106 evening doji star, 68, 69 Doji, 13, 41–48 pattern description and criteria, 68 as component of other patterns, 43 Exchange-traded funds (ETFs), 215–216 dragonfly doji, 47–48 Exhaustion gap, 154, 155 gravestone, 28, 44–46 Exponential moving average (EMA), long-legged, 17, 18, 44, 45 187–189 northern doji, 42, 43, 235–236 pattern description and criteria, Failed reversal patterns, 86 41–42 Falling window, 151, 152, 153 southern doji, 42, 43, 237 False breakout, 81 Dojima Rice Exchange, 4 Fibonacci, Leonardo, 130 Doji star, 66 Fibonacci retracement, 130, 131 bearish, 66, 67 Fluor Corp. (FLR), 212 bullish, 67 Format, pattern, 29 Double bottom, 35, 124, 140, 189, Foster Wheeler Ltd. (FWLT), 154 211 Freemont General Corp. (FMT), Double top, 34, 159, 177–178 159–160 Dow Jones Industrial Average, 9, 83, Gaps, 151–173 84, 133–135, 182, 189, 191, defined, 151 200, 215 morning gap, 151, 152, 161–167 Downtrend, 121, 123–125 morning gap’s role in swing trading, Dragonfly doji, 47–48 167–173 Dril-Quip Inc. (DRQ), 190 price (true) gaps, 151–161 Dryships (DRYS), 125–126 providing support or resistance, DTS Inc. (DTSI), 148 183–185 General Motors Corp. (GM), 178–180 EasyLanguage®, 203 Getting Started in Chart Patterns Easy Scan, 205 (Bulkowski), 107 Echelon Corp. (ELON), 141–142 Golinhas Aereas (GOL), 194–195 Electronic Communications Google (GOOG), 204 Networks (ECNs), 173 Gravestone doji, 28, 44–46 Engulfing patterns, 55–60 Great Wolf Resorts (WOLF), 224, bearish, 56–58, 60 223–231 bullish, 58–59 pattern description and criteria, Hammer, 13, 34–36, 237 55–56 Hanging man, 31–34, 235 JWBK100-IND.qxd 2/21/08 9:07 AM Page 256 epg WILEY:JOBS:Wiley_PT:Logan:JWBK100_QXD%:Printer File:JW 256 INDEX Harami, 20, 61–65 Lane, George, 145 bearish, 62–63 Las Vegas Sands (LVS), 74, 75 bullish, 63–64 Limited Brands Inc. (LTD), 40 pattern description and criteria, 61 Logarithmic scale, 110–111 Harami cross, 61 Long (long position), 32 bearish, 62 Long black candle, 17 bullish, 63 Longer-term volume analysis, 104, Head-and-shoulders top, 94, 96 105–108 High-wave candle, 17, 21–22 Long-legged doji, 17, 18, 44, 45 Histogram, volume, 102–103 Long-term trend, 127–131 Hoku Scientific (HOKU), 111, 112 Long white candle, 16–17 Homma, Munehisa, 4 Honeywell International (HON), Major market average, 133 128–129 Major trend, 127 Horizontal channel, 81 Marchex Inc. (MCHX), 42, 43 Margin account, 214 Immersion Corp. (IMMR), 109 Marubozu, 18 Immucor Inc. (BLUD), 121, 122 Maximum stop level, 161 Imperial Oil Ltd. (IMO), 51 McClellan Summation Index, 113 Infosys Technologies (INFY), 44, 45 McDonald’s (MCD), 195–197 Inside bar, 65 McMorgan Exploration Co. (MMR), Inside day, 65 71, 72 Intercontinental Exchange Inc. (ICE), 54 Mean reversion, defined, 136 Intermediate-term trend, 131 Measuring gap, 154 Intraday charts, 25–26 MetaStock, 92, 200, 203 Intraday data, 15 Methanex Corp. (MEOH), 227, Inverted hammer, 36, 39–40, 237 227–229 pattern description and criteria, 36 MGP Ingredients Inc. (MGPI), 38 Investing, 9 Minor consolidation, 136 Investools Inc. (SWIM), 124–125 Minor trend, 131 Investor, 9 Momentum of the trend, Island reversal, 156–157 144–149 defined, 144 Japanese candlestick charting, 3–4, 151 Morgan Stanley (MS), 85 Japanese Candlestick Charting Techniques Morning doji star, 72–73 (Nison), 4, 19, 44, 62 Morning gap, 151, 152, 161–167 Japanese candlestick line, 11 candlesticks and, 165–166 defined, 161 Knight Capital Group Inc. (NITE), exiting a trade in premarket, 173 73, 74 filled, 163 Knightsbridge Tankers (VLCCF), interpreting, 166–167 49–50 intraday view of, 164–165 JWBK100-IND.qxd 2/21/08 9:07 AM Page 257 epg WILEY:JOBS:Wiley_PT:Logan:JWBK100_QXD%:Printer File:JW INDEX 257 morning gaps and pullbacks, Otto, Herbert, 234 170–172 O2 Micro International Ltd. (OIIM), pullbacks and, 170–172 127–128 role in swing trading, 167–173 Outside bar, 59 variations of, 163–164 Outside day, 59 Morning star, 20, 71–76, 238 Overbought conditions, 79 morning doji star, 72–73 stochastic oscillator and, 146, 147 pattern description and criteria, 72 tails and, 96 Morris, Gregory L., 28 Overextended stocks, 143 Moving average, 100, 116–118 Oversold conditions, 79 defined, 116 stochastic oscillator and, 146 exponential, 187–189 tails and, 96 providing support or resistance, 185–189 Pattern gap, 153 simple, 187–189 Pattern inside a pattern, 140 Moving Average Convergence Pattern recognition quiz, 217–220 Divergence (MACD), 144 Peabody Energy (BTU), 87, 88 Murphy, John, 144 Peak, 118–119. See also peaks and Myriad Genetics Inc. (MYGN), bottoms 191–192 Peaks and bottoms resistance and support at, 176–180 Narrow-range (NR) bar, 18 Pediatrix Medical Group Inc. (PDX), Nasdaq Composite Index, 84, 133, 35–36 188–189, 200 Personal Criteria Formulas (PCFs), 202 Nasdaq 100 Index, 216 Piercing pattern, 52–55, 237 Negative divergence, 106 pattern description and criteria, New York Stock Exchange (NYSE), 52–53 101, 201 Pier I Imports Inc. (PIR), 208–209 Nison, Steve, 4, 19, 44, 62, 63 Positive divergence, 106 Nonideal patterns and variations, 30 Practice sets, 217–231 Northern doji, 42, 43, 235–236 detailed chart analysis, 220–231 pattern recognition quiz, 217–220 Odd lot, 204 Premarket trading, 173 Omni Energy (OMNI), 193–194 Price, 8–9, 100 Opening gap, 161–173. See also gaps, 151–161 morning gap movement, 79–82 Opening price, 14–15, 24 objective, 207 Oscillator, 82, 100 relationships with volume, 105–106 defined, 144 swing, 131 stochastic, 145–147 volume filter and, 203–206 uses of, 144–145 Price gaps, 151–161 OSI Pharmaceuticals Inc. (OSIP), 80 filling the gap, 157 JWBK100-IND.qxd 2/21/08 9:07 AM Page 258 epg WILEY:JOBS:Wiley_PT:Logan:JWBK100_QXD%:Printer File:JW 258 INDEX interpreting, 158–161 stars, 66–76 support and resistance and, 157–158 trend reversal, 85–86 types of, 153–157 Reversion to the mean, 135–140 Primary trend, 127 Reward, defined, 207 Probability, 140–142 Reward-to-risk ratio, 71, 207–210 defined, 141 Reward versus risk, 207–210 ProShares ETFs, 215–216 Rising window, 151, 152, 153 ProShares UltraShort Oil & Gas ETF Risk, defined, 207 (DUG), 216 Riverbed Technologies Inc.