Technical Analysis

Healthy Trends Cont.

Uptrend 1:

1. On Feb. 17th a period of uncertainty on lower volume ends. As price increases, volume picks up. This holds with the diagnosis of a healthy trend.
2. The large blue candle on February 20th comes on high volume. After wards volume declines as there are a couple of red candles. This behavior again holds with the principles to start this section; those sessions in which the price goes against the trend come on lower volumes.
3. As investors see that price is picking up again, volume increases before coming down on the following two losing sessions (for a long USD/JPY position).
4. Again, price starts increasing and there is a move up in volume. As volume increases here on March 3rd, the price activity is not a blue candle, but a red stubby candle meaning there was a struggle between bears and bulls that didn’t move the price much. This may imply that the uptrend is waning.
5. On the following two days, price goes up on decreasing volume, a truer warning sign that the trend is weakening or ready to reverse. 

Downtrend 1:

6. After the up move tapers off, there is a red candle on lower volume. This is the top.
7. Price begins to move down. As price falls faster, volume increases, meaning that the trend is a healthy one. The moving average of volume is heading up during this time, opposed to the flat shape it had during the second half of the uptrend.
8. The candle on March 18th is the biggest and has the most volume signaling perhaps a market bottom. A large finishing candle on high volume is representative of the end of a sell-off period.
9. There is a pause for the next two sessions, on lower volume, as there is a battle between bears and bulls. The trend is not over however and continues from this pause to head lower on increasing volume.
10. The lone blue candle comes on low volume, keeping in line with the tenets above. The next day sees another huge drop, which is followed by a decline that does not reach the low set in the previous session and on lower volume. Is this the end?
11. The next 3 days show a new trend forming as prices go higher on higher volume.

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