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Candlestick Pattern

The document outlines various candlestick patterns used in technical analysis for predicting market trends, including bullish and bearish signals. Each pattern is described with its structure and the implications it has for market movements, such as reversals or continuations. Key patterns discussed include the Morning Star, Bullish Engulfing, and Three Black Crows, among others.

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Sagar Sharma
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0% found this document useful (0 votes)
5 views19 pages

Candlestick Pattern

The document outlines various candlestick patterns used in technical analysis for predicting market trends, including bullish and bearish signals. Each pattern is described with its structure and the implications it has for market movements, such as reversals or continuations. Key patterns discussed include the Morning Star, Bullish Engulfing, and Three Black Crows, among others.

Uploaded by

Sagar Sharma
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

The Morning Star is a three-candlestick pattern that converts downtrend to The Piercing Line is a two-candlestick pattern that begins

that begins with a strong


uptrend. It starts with a long bearish candle, followed by a small-bodied bearish candle followed by a bullish candle. The second candle opens
The Bullish
candle Engulfing
(either bullish Pattern consists
or bearish) of two
and ends candles:
with a long bullish candle. below the previous candle's close but closes above the midpoint (50%)
of the previous bearish candle.
What A smallStar
 Morning bearish candle
Pattern followed
Indicates: bypattern
This a signifies a strong reversal What Piercing Line Pattern Indicates: This pattern indicates a Bullish
Hammer is a single candlestick pattern with
signal, as it shows that the sellers are losing control and the buyers are taking reversal signal, which means buyers are stepping in and reversing the
 Larger bullish candle.  A small body candle, and
over. downtrend.
 Long lower shadow/wick
What Bullish Engulfing Pattern Indicates: The body of the bullish candle What Hammer Pattern Indicates: Whenever the chart is in a downtrend, and a
completely engulfs the body of the bearish candle, indicating strong Hammer candlestick is made, it indicates that the share price might go up
buying strength. because the buyers have become more dominant or active.
The Three White Soldiers pattern consists of three long bullish candles with
The Bullish Harami is a two-candlestick pattern that signals a possible small wicks that appear consecutively one after another. Each new candle
upward trend reversal. Here, a small bullish candle is completely opens inside the previous one’s body and closes higher than the last.
contained within the body of the previous large bearish candle. What Three White Soldiers Pattern Indicates: This candlestick pattern
indicates that the market is moving from a downtrend (falling prices) to an
What Bullish Harami Pattern Indicates: This pattern suggests a decrease in uptrend (rising prices).
selling pressure and the possibility of a bullish reversal.
The Inverted Hammer Pattern appears at the bottom of a downtrend and The Dragonfly Doji is a single candlestick pattern with a very small body and
features a small body with a long upper shadow and little to no lower a long lower shadow that appears at the bottom of a downtrend.
shadow.
What Dragonfly Doji Bullish Pattern Indicates: It indicates that a stock's open,
What Inverted Hammer Pattern Indicates: This pattern suggests that high, and close prices are all near the same level. Dragonfly Doji Bullish
buyers attempted to push prices higher during the session. Pattern might seem similar to Hammer Pattern but Dragonfly Doji has no
body, while Hammer has a small body at the top.
The Bullish Abandoned Baby is a three-candlestick pattern. It consists of a The Three Inside Up pattern consists of three candles:
long bearish candle, followed by a doji candle that gaps down, and then a  A large bearish candle,
long bullish candle that gaps up.  A small bullish candle that closes above the 50% level of the first
candle and
What Bullish Abandoned Baby Pattern Indicates: This pattern signals a  A third bullish candle that closes above the first candle's open.
strong reversal and a significant shift from bearish to bullish sentiment. What Three Inside Up Pattern Indicates: This pattern indicates a potential
reversal in the chart/share/stock.
As the name suggests, the three outside up pattern is a three candlestick The Bullish Kicker pattern starts with a long bearish candle followed by an
pattern that starts with a bearish candle, followed by a bullish candle that even longer bullish candlestick. The candle opens higher than the previous
engulfs the first candle and ends with another bullish candle that closes day's closing price and rises even more.
higher. What Kicker Pattern Indicates: Signals a strong reversal in market
What Three Outside Up Pattern Indicates: This pattern confirms the sentiment. This pattern shows that even though the market was down the
strength of the bullish reversal. day before, buyers suddenly took control and pushed the price up quickly.
The Rising Three Methods Pattern consists of five candles in a continuation
Tweezer Bottom Pattern is a two-candlestick pattern that includes two pattern, i.e., a long bullish candle, three small bearish candles that trade
equal-sized bullish and bearish candles. above the low and below the high of the first candlestick, and another long
bullish candle that closes above the high of the first candlestick.
What Tweezer Bottom Pattern Indicates: This pattern indicates that the
What Rising Three Methods Pattern Indicates: Uptrend is likely to continue.
market has found a support level.
It means the price takes a short break or goes slightly down before it moves
up again. The pattern suggests that buyers are still in control, and the price
should go up after this small pause.
The Concealing Baby Swallow is a four-candlestick pattern that starts The Mat Hold pattern is similar to the rising three methods pattern. It is a
with two long bearish candles, followed by a gap down with a small continuation pattern consisting of five candles that start with a long bullish
bullish or bearish candle and ends with another long bearish candle candle, followed by three small bearish candles (a smaller bearish candles that
that completely engulfs the small candle. move lower) that stay within the range of the first candle and end with another
long bullish candle that closes above the high of the first candle.
What Concealing Baby Swallow Pattern Indicates: Selling pressure is What Mat Hold Pattern Indicates: Brief pause or consolidation in an uptrend.
decreasing in a downtrend. It suggests a potential bullish reversal,
where the downtrend may be coming to an end, and the price could
start to rise.
The Bullish Belt Hold Pattern is a single candlestick pattern that appears at
The bullish Separating Lines Pattern is a two-candlestick pattern that the bottom of a downtrend. The opening price of the candle becomes
includes a bearish candle followed by a bullish candle that opens at the lower for the day and closes near the high, with little to no lower shadow.
same level as a bearish candle. What Bullish Belt Hold Pattern Indicates: Strong buying pressure and a
What Bullish Separating Lines Pattern Indicates: This pattern suggests that potential reversal from a downtrend to an uptrend.
the uptrend will continue after a brief pause.
The

Three-Line Strike Pattern is made up of four candles: three consecutive


bullish candles followed by a long bearish candle that opens higher and
The Ladder Bottom Pattern is a five-candlestick pattern that starts with three
closes lower than the first candle of the pattern.
consecutive long bearish candles, followed by a small bearish or bullish candle
What Three-Line Strike Pattern Indicates: Despite the bearish fourth and ends with a long bullish candle.
candle, it suggests that the price will resume moving upward after a What Ladder Bottom Pattern Indicates: Bearish trend is ending and buying
brief pause. pressure may be starting to take control.
Three Black Crows bearish candlestick pattern forms when a small bullish
The meeting Lines Pattern consists of two candles: a long bearish candle
candle is followed by a large bearish candle that completely engulfs the
followed by a long bullish candle that opens lower but closes at the same
previous green candle.
level as the bearish candle’s close.
What Bearish Engulfing Pattern Indicates: Generally, this pattern indicates
What Meeting Lines Pattern Indicates: Bullish reversal after a downtrend
that sellers have taken control, and the share price might continue to fall.
and indicates a shift from selling to buying pressure.
A bearish Belt Hold Pattern is visible when there’s an uptrend in the When three consecutive long-red candles with small wicks are visible, three
market. A single long red candle is formed that opens at the high of the day Black Crows pattern is formed.
and closes near the low, with little to no upper shadow. What Three Black Crows Pattern Indicates: The pattern suggests a
What Bearish Belt Hold Pattern Indicates: It indicates strong selling continuation of a downtrend, showing strong and steady selling pressure.
pressure, which results in an ascending market.
A bearish Three-Line Strike Pattern forms three consecutive red candles, Bearish Hanging Man Pattern appears at the top of the uptrend as a single
and lastly, a long green candle completes the pattern. It opens lower and candle with a small body and a long lower shadow.
closes above the first candle’s opening. What Bearish Hanging Man Pattern Indicates: It indicates that selling
What Bearish Three-Line Strike Pattern Indicates: Despite the fourth bullish pressure is increasing and that the uptrend might be coming to an end.
candle, the pattern indicates a short pullback and continuation of the
downtrend.
Bearish Evening Star is a three-candlestick pattern that starts with a long
Upside Gap Two Crows Pattern indicates three candles, i.e., a long green bullish candle followed by a small-bodied candle that gaps up and ends
candle, followed by two small red candles that create a gap up. The second with a long bearish candle that closes well into the body of the first candle.
red candle closes below the first red candle’s close.
What Upside Gap Two Crows Pattern Indicates: Potential reversal or brief What Bearish Evening Star Pattern Indicates: The uptrend is losing
consolidation before the downtrend continues. momentum, and a downtrend may be starting.
Bearish Shooting Star is a single candlestick pattern with a small body, a
long upper shadow, and little to no lower shadow. It appears at the top Bearish Harami is a two-candlestick pattern where a small bearish candle is
of an uptrend. completely engulfed within the body of the previous large bullish candle.
What Bearish Shooting Star Pattern Indicates: The long upper shadow What Bearish Harami Pattern Indicates: Buying pressure is weakening, and a
shows that buyers were in control earlier, but sellers took over and reversal to the downside might be coming.
pushed the price down, indicating a potential reversal.
Bearish Doji Star is a two-candlestick pattern that starts with a long bullish Bearish Abandoned Baby Pattern is a three-candlestick pattern that starts
candle followed by a Doji (a candle with a very small body). with a long bullish candle, followed by a Doji that gaps up from the
What Bearish Doji Star Pattern Indicates: The Doji shows indecision in the previous candle, and ends with a long bearish candle that gaps down from
market, and if it's followed by a bearish candle, it confirms the reversal and the Doji.
signals a potential downtrend. What Bearish Abandoned Baby Pattern Indicates: This pattern indicates a
sharp reversal and signals the beginning of a downtrend.
The Bearish Tweezer Tops pattern consists of two or more candles with
matching highs and appears at the top of an uptrend. The first candle is
usually bullish, and the second candle is bearish. It starts with a long bullish candle, followed by a long bearish candle that
What Bearish Tweezer Top Pattern Indicates: The matching highs show that opens below the previous candle’s opening price and closes lower.
the upward momentum is weakening, and a reversal might be coming. What Bearish Kicker Pattern Indicates: Dramatic shift in market sentiment
and suggests a sudden reversal to the downside.
Bearish Three Inside Down is a three-candlestick pattern that starts with a
bullish candle, followed by a smaller bearish candle that is completely
within the first candle and ends with another bearish candle that closes
lower. Bearish Three Outside is a three-candlestick pattern that starts with a
What Bearish Three Inside Down Pattern Indicates: Sellers have start bullish candle, followed by a bearish candle that engulfs the first candle and
gaining dominance over the buyers. This confirms the bearish reversal and ends with another bearish candle that closes lower.
signals a potential downtrend. What Bearish Three Outside Down Pattern Indicates: This pattern confirms
the strength of the bearish reversal.
Bearish Mat Hold is a five-candlestick pattern that starts with a long bearish Dark Cloud Cover Pattern forms a long green candle followed by a red
candle, followed by three smaller bullish candles that stay within the range candle that opens above the previous high but closes below the midpoint
of the first candle and ends with another long bearish candle that closes of the green candle.
below the first candle. What Dark Cloud Cover Pattern Indicates: The uptrend might be over, and a
What Bearish Mat Hold Pattern Indicates: Brief pause before the downtrend could begin.
downtrend continues.

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