New Intermed Uptrend!!
- Thread starter Saint
- Start date
- Status
JAPANESE CANDLESTICKS REVERSAL PATTERNS(CONT.)
DARK CLOUD COVER
-This is again a dual candle pattern.
-Signifies a top reversal pattern.
-The first candle is a strong white real body.
-The second day's price opens above the previous session's high and then penetrates deep into the previous day's candle.
-Greater the penetration,greater the possibility ofa top.(better if can take out half of the previous day's white candle)
-The above pattern is something like the Bearish Engulfing Pattern,the only difference being that the Dark Cloud Cover takes out about half of the prior day's candle,while the engulfing pattern takes out the whole candle and more.
Again,from the trade perspective,this does not mean that we get all gung ho short......this acts as a warning,a possible turn around,a possible top.We then act on our sell signal,with a stop above the high of the Dark Cloud Cover Candle.
PIERCING PATTERN
-Counterpart to the Dark Cloud Cover.
-signifies a possible bottom.
-Here we have a dual candle pattern,the first a wide range bearish candle followed by a white candle that starts lower than the low of the previous candle and rallies to more than 50% of the previous bearish candle.
-This is bullish.....a signal of tiring bears and stronger bulls.Yet we do not act on this alone.......we still do our pivot analysis,our indicators,trendlines,etc
MORNING STAR
-This is a three candle pattern.
-Candle1=We have wide range bearish candle.Bears are in command.
-Candle 2=Here there is a small real body which does not touch the real body of the previous candle.Tiring Bears......an inability to drive the stock down more.
-Candle 3=Bullish candle that pierces into the first candle's body.Bulls in control.
-Signal of a possible bottom as bulls seize the initiative.
EVENING STAR
-Counterpart to the morning Star.
-sign of possible top reversal.
-again 3 candle pattern
-Candle 1=Wide range bullish candle.Bulls in command.
-Candle2=Small real body that does not touch the real body of the previous candle.Tiring Bulls......as they show an inability to drive prices higher.
-Candle 3=Bearish candle that pierces into the body of the first candle.Bears seize the initiative from the bulls driving prices lower.
SPINNING TOP/DOJI
-Spinning tops have long upper shadows and long lower shadows and very little real body.
-Can occur after an uptrend or a downtrend.
-signify potential reversal.
-Dojis have long upper and lower shadows and no real body(i.e the open and close is at the same price).
-they signify potential reversal like the spinning tops.
Happy Trading!!
Saint
DARK CLOUD COVER
-This is again a dual candle pattern.
-Signifies a top reversal pattern.
-The first candle is a strong white real body.
-The second day's price opens above the previous session's high and then penetrates deep into the previous day's candle.
-Greater the penetration,greater the possibility ofa top.(better if can take out half of the previous day's white candle)
-The above pattern is something like the Bearish Engulfing Pattern,the only difference being that the Dark Cloud Cover takes out about half of the prior day's candle,while the engulfing pattern takes out the whole candle and more.
Again,from the trade perspective,this does not mean that we get all gung ho short......this acts as a warning,a possible turn around,a possible top.We then act on our sell signal,with a stop above the high of the Dark Cloud Cover Candle.
PIERCING PATTERN
-Counterpart to the Dark Cloud Cover.
-signifies a possible bottom.
-Here we have a dual candle pattern,the first a wide range bearish candle followed by a white candle that starts lower than the low of the previous candle and rallies to more than 50% of the previous bearish candle.
-This is bullish.....a signal of tiring bears and stronger bulls.Yet we do not act on this alone.......we still do our pivot analysis,our indicators,trendlines,etc
MORNING STAR
-This is a three candle pattern.
-Candle1=We have wide range bearish candle.Bears are in command.
-Candle 2=Here there is a small real body which does not touch the real body of the previous candle.Tiring Bears......an inability to drive the stock down more.
-Candle 3=Bullish candle that pierces into the first candle's body.Bulls in control.
-Signal of a possible bottom as bulls seize the initiative.
EVENING STAR
-Counterpart to the morning Star.
-sign of possible top reversal.
-again 3 candle pattern
-Candle 1=Wide range bullish candle.Bulls in command.
-Candle2=Small real body that does not touch the real body of the previous candle.Tiring Bulls......as they show an inability to drive prices higher.
-Candle 3=Bearish candle that pierces into the body of the first candle.Bears seize the initiative from the bulls driving prices lower.
SPINNING TOP/DOJI
-Spinning tops have long upper shadows and long lower shadows and very little real body.
-Can occur after an uptrend or a downtrend.
-signify potential reversal.
-Dojis have long upper and lower shadows and no real body(i.e the open and close is at the same price).
-they signify potential reversal like the spinning tops.
Happy Trading!!
Saint
Last edited:
Hi SSM,
Not symmetrical as rightly pointed out.........in h&s pattern,the 2 shoulders need not be exactly the same height,sometimes we can have 2 left shoulders and then a head,and then 2 right shoulders.....sometimes you could get 2 heads.All of these are called complex h&s patterns.
The beauty of 2 left shoulders is that we can safely expect 2 right shoulders before the fall............
In Karnataka Bank,we have a left shoulder made on huge volume,then the head made in much lesser volume and then followed by a weakish right shoulder made on very little comparative volumes.The neckline is sloping upwards in this case.That bearish move down on the 22nd last week looks like a confirmation move down breaking the neckline,and now we have a return move up.
Breaking of the 108 area confirms more bearishness as this stock corrects on longer term charts.
From trade angle,if you are a bit of an aggressive sort,short with a stop at 118.But if it makes a strong move and takes out the 118 levels,then take your stops.Add more once the 108 levels are taken out.Target(first)=96.
Wrong place actually for this post........talkng of shorts in a Post on Uptrends.
Happy Trading!
Saint
Not symmetrical as rightly pointed out.........in h&s pattern,the 2 shoulders need not be exactly the same height,sometimes we can have 2 left shoulders and then a head,and then 2 right shoulders.....sometimes you could get 2 heads.All of these are called complex h&s patterns.
The beauty of 2 left shoulders is that we can safely expect 2 right shoulders before the fall............
In Karnataka Bank,we have a left shoulder made on huge volume,then the head made in much lesser volume and then followed by a weakish right shoulder made on very little comparative volumes.The neckline is sloping upwards in this case.That bearish move down on the 22nd last week looks like a confirmation move down breaking the neckline,and now we have a return move up.
Breaking of the 108 area confirms more bearishness as this stock corrects on longer term charts.
From trade angle,if you are a bit of an aggressive sort,short with a stop at 118.But if it makes a strong move and takes out the 118 levels,then take your stops.Add more once the 108 levels are taken out.Target(first)=96.
Wrong place actually for this post........talkng of shorts in a Post on Uptrends.
Happy Trading!
Saint
- Status
Similar threads
-
-
-
-
Swing Trading Stock Pick - Dabur India - Beginning of a New Intermediate Uptrend
- Started by Traderji
- Replies: 14
-