Showing posts with the label piercing- pattern


PIERCING CANDLESTICK PATTERN The bullish counterpart to the dark cloud cover is the “piercing pattern.” The first thing to look for is to spot the piercing pattern in an existing downtrend, which consists of a long red candlestick followed by a gap lower open during the next session, but which closes at least halfway into the prior black candlestick’s real body.                                   The Piercing Pattern is composed of a two-candle formation in a down trending market. With daily candles, the piercing pattern will often end a minor downtrend (a downtrend that lasts between six and fifteen trading days). The day before the piercing candle appears, the daily candle should have a fairly large dark real body, signifying a strong down day. Criteria 1. The downtrend has been evident for a good period. 2. The body of the first candle is red; the body of the second candle is green. 3. A long red candle occurs at the end of the t