‘Chitra’ Mani Darpan:
Stock Market Looking for Direction — Even by Candlelight:
Imagine you're sitting in a vehicle. How do you know it's in motion? The vehicle makes noises, things outside appear to be moving, your hair flies based on the vehicle’s speed, it shakes, and the indicators keep changing…
This is how movement can be observed in the stock market too. Is a share price headed upward? Downward? Or is it just pretending? There are many tools to help us reason about the direction of the market. Candlestick analysis is one of them.
In fact, the Japanese developed candlestick analysis in the 17th–18th century to understand demand and supply in the rice trade — and today, it's used in stock markets all over the world.
A candle is green if the share or index price is going up. It turns red if the price is falling. If the candle is green, the bottom of its body indicates the opening price of the share. The wicks (or shadows) above and below represent price movements, with longer wicks often indicating market uncertainty or reversal. If the candle is red, the closing price is lower than the opening — the opposite of a green candle.
Consider this: the Earth is moving, but we don’t feel it. Even while sitting in a fast-moving airplane, we may not sense motion. Similarly, candlestick analysis doesn’t always tell the full story. How can candles account for changes in momentum, unexpected news, or shifting sentiment?
After all, on a man’s birthday, candles are placed to indicate his age. But for girls, just one candle is lit — no matter the age. So too with candlestick studies — sometimes they show just one side of a complex picture.
Cartoon-Writing: Vasantha Hosabettu
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