Looking for a potential bullish reversal signal in technical analysis? Consider the Piercing Line Candlestick Pattern. This pattern is characterized by a bearish red candle with a large body followed by a similarly large bullish green candle that closes above the middle of the red candle. In this article, we will explore the Piercing Line Candlestick Pattern, including the candle body, wick, and colors, as well as its Modus Operandi and Fun Fact.
Candle Body
The first candle will be a bearish red candle with a large candle body. The second candle will be a bullish green candle with a similarly large body. The important fact is that the bullish green second candle closes above the middle (50%) of the first red bearish candle.
Candle Wick / Shadow
The wicks on both candles can range from short to medium.
Candle Colors
The Piercing Line has two candles. The red candle always precedes the green candle.
Modus Operandi
The Piercing Line usually occurs at the bottom of a downtrend. It indicates the trend might change in a bullish direction. Please note this pattern is not the most accurate and other technical analysis confluence must also be obtained.
Fun Fact
The Piercing Line Pattern is very similar to The Bullish Engulfing Pattern but not as strong.
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One Response
This chart pattern is powerful for day trading. Love it.