The spinning top candlestick consists of a short body with a longer wick on either side. The length of the wicks may vary, but they are both longer than the body and similar in length to each other. This pattern is similar to the long-legged doji, but with a slightly larger body.
The spinning top can be white or black, with both having important implications for the future of the trend. A white spinning top means that the market fluctuated but closed just a bit above its opening price, while a black spinning top denotes that it fluctuated but closed below the opening price.
A spinning top is a powerful indicator that the market is indecisive. There has been significant buying and selling activity, but at the end of the day the stock closed not far from where it opened. Both buyers and sellers reigned at different parts of the day, but neither made much headway. In other words, the buyers and sellers are in a tug of war, but neither side is showing a clear advantage. This is especially significant in trending markets because it indicates that the trend is losing momentum. A spinning top can indicate that there is considerable indecision that may result in a trend reversal. The market has moved higher, then sharply lower, or vice versa.
Your Next Move
Single sticks reflect only one day’s trading and thus must be considered within this context. For example, if a white spinning top occurs after a long white candlestick, it means the bullish trend is weakening. If it is observed after a long black candlestick, it can mean that there is a potential reversal of the trend. Vice versa, a black spinning top after a long black candlestick indicates the trend is weakening, while the same candlestick after a long white candlestick can predict a reversal. While the spinning top is a significant pattern, it is not considered a reliable enough indicator to warrant action on its own. The spinning top can predict a reversal or an interruption, but it also may be part of a continuation pattern. You should not act based on a spinning top candlestick alone.
Confirmation
The spinning top candlestick should be considered along with other candlesticks to determine the trend. Depending on the trend up until that point, confirmation can mean i) a continuation of the upward ; ii) or downward trend that the spinning top forecasted, iii) or even stagnation. However, do not take action without confirmation. If there is a spinning top followed by a continuation of the prior trend, you will be glad you waited for confirmation.
14 comments:
@ Ilango sir,
Very impressive analysis & good guide for learners like me.
A request: Is it possible to post EOD analysis for BN @wealthnifty blog same day night?. We will have more time to read & understand.
Only pre-mkt view being posted for BN before mkt opens.
Chandrabose
Lovely analysis and clear and crisp message with educational supplement. Thank you and Good night sir.
What crisp And clear explaination. thanks sir.
Ilango Sir, I have doubt about if negative or positive divergence time you always mentioned "PRICE HAS NOT CONFIRMED ", how can we find it price side confirmation, need some explain...Thanks...
@ ChandraBose,
Download the bank Nifty TA(21) file from the link provided at the top right side of this blog under the title "EW/Technical Analysis", you will get an unadulterated view before world cues colours our view in the Pre-Market.
You can get detailed Nifty analysis from "JustNifty TA(21)".
You can get some valuable stock analysis from
" Rajagopal's NF TA(21)"
"Rajagopal's Vol TA(21)"
"Sundar's TA(21)"
"JNSAR for Stocks(21)".
"Candle stick Analysis" is presented from a site, the link for which will be provided later.
@ Ganesh,
Read all about divergences trade here below.
http://tradeinniftyonly.blogspot.com/2009/11/divergence-trademost-potent.html
Though we often take a divergence trade before a price confirmation in an aggressive manner and use price confirmation as a second reference.
In an uptrend when a -ve div start to appear, a minimum price confirmation may be a "close below 3ema" or conservatively a "Close below 5ema" depending on the time frame you are looking at.
And vice versa in a downtrend.
Thanks...I will read it above link ....
Sir,
Every time we get to learn new from you & always curious to know that whats next..!!!!!
I read somewhere that:
"You can teach a student a lesson for a day; but if you can teach him to learn by creating curiosity, he will continue the learning process as long as he lives..
--By Clay P. Bedford "
Hey friends new buy signal emerged in BHEL & Tatapower and sell signal in National Aluminum..
As per JNSAR for Stock..
Nice post sir.
Interestingly enough FIIs are net sellers in derivatives in a big way today for the first time after so many days. But they have bought heavily in cash segment.
SIR,
just now i reach home and curious to view ur evening write up, it is very perfect way of presenting the scenario of the market status on the eod. after reading ur write-up i too have the same doubt which ganesh had, but u r kind enough that u already replied my doubt well in advance....thank u sir and ofcourse thanks to ganesh too, good night.
significant observation by sudarshan sukhani
A DOJI
In the near month contract for Nifty Futures (September), a DOJI has been made today. The DOJI is a bar in which the open and close are roughly equal. Today's DOJI comes after a sustained advance. The Japanese attach great importance to the DOJI. On a DOJI day,the buyers and sellers are equally matched. That is why after a daylong battle, buyers could not push prices up, while sellers could not push prices down. Therefore, the open and close were equal, hence the DOJI.
Why is it significant? So far, the bulls have been in total control of the market. There has been no confusion about the direction. But, on a day when higher highs were made, bulls couldnot push closing prices could not go above the open. Therefopre, there has been a subtle shift in the balance of power from bullish to neutral. Probably, some of the bulls have retreated. This could be just a short term blip. We will see. A close below the DOJI low will confirm that the scenrio is shifting to neuutral. A close above the DOJI high will tell us that the DOJi was just one day of consolidation. Interesting!
source- http://www.sudarshanonline.com/
Thanks dare for your update.It is really useful.
Nalco stock chart has given the sell signal,but nalco futures chart still shows it is in +ve zone,Futures close below 405 may give a clear sell signal.
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