the hAnDbook of teChnICAl AnAlysIsLet us now examine a couple of charts and attempt to work out their bullish
and bearish indications. See Figure 16.19.
From Figure 16.19, the bearish indications are:
■ (^) The cloud is in a downtrend.
■ (^) Price is below the cloud.
■ (^) Both the Tenkan‐sen and Kijun‐sen are below the cloud.
■ (^) The Chikou Span is retroactively below the cloud, Tenkan‐sen, and Kijun‐sen,
as seen at Time line 1
From Figure 16.19, the bullish indications are:
■ (^) Price is above both the Tenkan‐sen and Kijun‐sen.
■ (^) Tenkan‐sen has crossed above the Kijun‐sen.
■ (^) The cloud is relatively thin above current price, indicating potentially weaker
resistance at the cloud.
■ (^) Although the overall sentiment is still bearish as price, Tenkan‐sen, Kijun‐sen,
and Chikou Span are all below the cloud, early signs of potential bullishness
are beginning to appear on the shorter‐term Ichimoku moving averages.
For our next example, refer to Figure 16.20.
From Figure 16.20, the bullish indications are:
■ (^) Price is above Kijun‐sen and the cloud.
■ (^) Tenkan‐sen has crossed above the Kijun‐sen.
■ (^) Both the Tenkan‐sen and Kijun‐sen are above the cloud.
FIgure 16.19 Indentifying Bullish and Bearish Signals on the Daily Dow Jones Shang-
hai Index.
Courtesy of Stockcharts.com