Candlestick patterns are very popular to indicate trend reversal. We have already discussed hanging man, hammer, shooting star, inverted hammer, dark cloud cover, piercing patterns, engulfing, evening star and morning star candlestick patterns. In this article we will be discussing Bullish and bearish meeting line candlestick patterns.
Bearish and Bullish meeting lines are two candle reversal patterns that signal a trend reversal is on the way. This means, to form the pattern, you are required to have a minimum of two candles in the opposite color.
Bullish Meeting Line Candlestick Pattern
Bullish meeting line candlestick pattern is created when following conditions are met;
- A bearish candle appeared as a continuation of the downtrend, which is considered as setup day.
- Next candle has a gap down opening, which clearly shows that bears are in control at the beginning, but at some point of time during the session, bulls appear in and take control to close the price at or nearly equal to the close price of the previous bearish candle.
- Both candles must have a large real body with opposite color.
This means on the second day the low of the opening price attracts buyers to step in, due to which the close reaches the previous bearish candle’s close and eliminates the gap that was created on the opening.
Bearish Meeting Line Candlestick Pattern
Bearish meeting line is a two candle pattern that appears in an uptrend. The first candle is a bullish bar, on the second candle you will find a gap up opening indicating bulls are in control, suddenly you will find bears stepped in to take down the price quickly by forming a large bearish candle, with the close of the day being very near to the previous day’s low.
Here are the rule of recognition;
- An uptrend is in progress.
- A long bullish candle formed as the first candle of the two-candlestick pattern.
- Second candle gaps higher on the opening, but bears push the price down to close it at or near the first day low.
- Both candles must have a large real body with opposite color.
Both bullish and bearish meeting line candlestick patterns are a fairly specific pattern and therefore do not occur frequently on candlestick charts. Both patterns may not be reliable on their own, therefore, traders require confirmation before taking any decision.
Traders should use additional technical indicators in conjunction with candlestick patterns to take additional confirmation before making any trading decisions.
Here is a list of candlestick patterns for your reference;
- Evening Star
- Morning Star
- Bearish Abandoned baby candlestick pattern
- Bullish Abandoned baby candlestick pattern
- Three Inside up/down
- Three outside up/down
- Inside Bar
- Bullish Piercing
- Dark Cloud Cover
- Spinning Top
- Shooting Star and Inverted Hammer
- Hammer & Hanging Man
- Gravestone, Dragonfly and long-legged Doji
- Engulfing Candlestick Pattern
- Spinning Top
- Marubozu
Be sure you practice identifying and trading these candlestick patterns on a demo account before trading them with real money.
In addition to the disclaimer below, please note, this article is not intended to provide investing or trading advice. Trading in the stock market and in other securities entails varying degrees of risk, and can result in loss of capital. Most investors and traders lose money. Readers seeking to engage in trading and/or investing should seek out extensive education on the topic and help of professionals.
