Teach Me How To DOJI

September 25, 2012 Chart of PX

PX closed with a doji today where the price probably reflects both the sentiment of the sellers (sell mainly due to the losses caused by the defective dam of mine tailings and the belief that the stock will continue to go down) and the sentiment of buyers (buy mainly due to the fact that PX is considered a responsible mining company despite the mine tailings accident and the stock will rebound soon and big-time). 

Miss Phyllis Pangilinan

The bulls and the bears bought and sold, respectively, at the same price level. Is this the end of the guilt-less selling and the beginning of frenzied buying? Who will blink first? 

If the dragonfly that preceded today's doji would be ignored, then our doji would be seen as preceded by a long red candle. A good sign that Miss Phyllis is now through with her period and that green thoughts and green actions are now definitely ours to enjoy. 

"Doji are important candlesticks that provide information on their own and as components of in a number of important patterns. Doji form when a security's open and close are virtually equal. The length of the upper and lower shadows can vary and the resulting candlestick looks like a cross, inverted cross or plus sign. Alone, doji are neutral patterns. Any bullish or bearish bias is based on preceding price action and future confirmation. The word "Doji" refers to both the singular and plural form. 

The relevance of a doji depends on the preceding trend or preceding candlesticks. After an advance, or long white candlestick, a doji signals that the buying pressure is starting to weaken. After a decline, or long black candlestick, a doji signals that selling pressure is starting to diminish. Doji indicate that the forces of supply and demand are becoming more evenly matched and a change in trend may be near. Doji alone are not enough to mark a reversal and further confirmation may be warranted." - The preceding doji explanation was lifted from Stockcharts.com - ChartSchool