Candlesticks Piercing Pattern
The Bullish Piercing Line Pattern shown below is a bottom reversal pattern. A long red candlestick is followed by a gap lower during the next day while the market is in downtrend. The day ends up as a strong white candlestick, which closes more than halfway into the prior black candlestick’s real body.
Characteristics
1. There is a downward trend
2. A large red candlestick appeas in the downward trend.
3. A large green candlestick opens below the previous red candlestick.
4. The large green candlestick closes above the 50 percent line of the previous candlestick.
Trading Psychology
1.The sellers have been in control and there is a continued negative feeling towards this stock. But this suddenly changes.
2. The green candlestick is quite large showing a strong buyers sentiment has begun.
3. How high the green candlestick closes above the 50 percent line is important. The higher the stronger the signals of a trend reversal.
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