Is a Bearish Single Day of Trade Positive or Negative for a Stock or ETF?

Tom Gentile

Posted in
Technical Analysis

By: Tom Gentile
February 9th, 2023

2 mins read

When you look at a stock or ETF chart, whether it be an Open, High, Low, Close (OHLC) chart or a Japanese Candlestick you will have the inclination to decide if the day was a positive day or negative day.

When you think in terms of a positive move you might think in terms of the move being bullish.  If you think in terms of a negative move you would likely think of that move being bearish.

I want to offer up a bit of perspective so you can enhance your power of observation when charting.

Look at this Image.  It is a 1-period / 1-day Japanese Candlestick for Deere & Co. (NYSE: DE).

Figure 1: 1-Day Japanese Candle chart for Deere & Co. (NYSE: DE)
Figure 1: 1-Day Japanese Candle chart for Deere & Co. (NYSE: DE)

If I were to ask you if this is a bullish or bearish day just for the sheer fact the candle is red that would have you thinking its bearish.

Make no mistake that ON THE DAY itself that IS bearish.  It is considered a bearish reversal day because the stock closed lower than its open price (comparing the top and bottom of the red candle body).

If I then ask you if this bearish day is  negative for the stock you would still probably answer yes, but what I want you to get in the habit of doing is look at the prior trading day (then days) and then answer.

Look at the 5-day candle chart on DE below; Figure 2

Figure 2: 5-day Japanese Candle chart on Deere & Co. (NYSE: DE)
Figure 2: 5-day Japanese Candle chart on Deere & Co. (NYSE: DE)

When you look at a chart and want to see positive price action, you want to see higher closes/closing prices.

From that perspective today’s close is higher than the prior day’s close and that is positive.

The point that is being emphasized here is you can have a bearish day happen, but look at it with the view of more than just the one day and look to see if despite the bearish day, it at least made a higher close.

If it did that is a positive.

Things may eventually turn bearish, but don’t let one days price action fully determine your directional sentiment for the security.

App: Toms Option Tools

Market Insight articles may show images of lists of stocks meeting a variety of options parameters like Unusual Call and or Put activity or Expensive IV found on my app Toms Option Tools.

Other times I will have other charts may work to amplify my educational points. 

Those options data lists, however, can be found on my app Tom’s Option Tools. Use your device to search up and download this app and get free access to the Morning Reports section of the app.

Other parts of the app are available at a premium subscription rate, but the Morning Reports Lists are yours free.


Stock and options trading has large potential rewards, but also large potential risk.

You must be aware of the risks and be willing to accept them in order to invest in the stock and options market. Do not trade with money you cannot afford to lose.

This is neither an offer to buy/sell/ or recommend a particular stock or option.

Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been actually executed, the results may have under or overcompensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with hindsight.

No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

Disclaimer of Warranties and Liabilities Tom Gentile and TomsTradingRoom, LLC including employees, consultants, and editors (“Publisher”) cannot and do not warrant the completeness or accuracy of the content found in our areas, or its usefulness for any particular purpose.

Tom Gentile and TomsTradingRoom, LLC also make no promises that our content or the service itself will be delivered to you uninterrupted, timely, secure, or error-free. Under no circumstances will Tom Gentile and TomsTradingRoom, LLC be liable for direct, indirect, incidental, or any other type of damages resulting from your use or downloading of any content on our site.

This includes, but is in no way limited to, loss or injury caused in whole or in part by our negligence or by anything beyond our control in creating or delivering any portion of Tom Gentile and TomsTradingRoom, LLC.

You are agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that Tom Gentile and TomsTradingRoom, LLC will not be liable for any I, investment decision made, or action taken by you, or others based upon reliance on news, information, or any other material published by Tom Gentile and TomsTradingRoom, LLC.

Tom Gentile and TomsTradingRoom, LLC relies on various sources of information that we believe to be accurate and reliable. However, we make no claims or representations as to the accuracy, completeness, or truth of any material contained on our site.

Tom Gentile and TomsTradingRoom, LLC are educational portals, providing content for educational and informational purposes only. Neither Tom Gentile nor TomsTradingRoom, LLC are a broker/dealer. Investors need a broker to trade stocks and options and must meet certain requirements. All securities, futures, and investments data and ideas are offered to self-directed investors. All prices in USD unless noted otherwise.

A full disclaimer can be found here:

Sign Up Now for Free Education!