Session : D

Common candle stick patterns

1. Bullish piercing

2. Bearish piercing

3. Bullish engulfing

4. Bearish engulfing

5. Bullish hammer candle

6. Bearish hammer candle

7. Doji candle

8. Morning star pattern

9. Evening star pattern

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Bullish piercing –

Bullish Piercing Pattern is a bullish reversal pattern that can be found at the end of a downtrend. This
candlestick pattern is used as an indicator to enter a long position or exit the sell position.

1. It is made up of two candles

2. The first candle must be Red in color and the second candle must open gap down or below the close of
first candle.

3. The second candle must be Green in color and close above the median (50% of the body) of first candle.

4. This pattern is more significant if made after a downtrend.

5. It tells us that bulls have successfully overridden bears.

6. If you notice it carefully it looks more like a fake breakdown.

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Bearish Piercing –
Bearish Piercing Pattern is a bullish reversal pattern that can be found at the end of an uptrend. This
candlestick pattern is used as an indicator to enter a short position or exit the long position.

1. It is made up of two candles

2. The first candle must be Green in color and the second candle must open gap up or above the close of
first candle.

3. The second candle must be red in color and close below the median (50% of the body) of first candle.

4. This pattern is more significant if made after an Uptrend.

5. It tells us that bears have successfully overridden bulls.

6. If you notice it carefully it looks more like a fake breakout.

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Bullish Engulfing –
Bullish engulfing candle is a reversal candle pattern consist of two candles, in which the second candle
completely engulf (Eat) the first candle :-

1. Here the first candle must be red in color

2.Then the second candle must open gap down or below the close of first candle.

3.Here the second candle closes above the first candle completely.

4.It can occur anywhere, but it is most significant at the bottom or support area.

5.It shows that buyers are aggressive and managed to push the prices up.

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Bearish Engulfing –
Bearish engulfing candle is a reversal candle pattern consist of two candles, in which the second candle
completely engulf (Eat) the first candle :-

1. Here the first candle must be green in color

2.Then the second candle must open gap up or above the close of first candle.

3.Here the second candle closes below the first candle completely.

4.It can occur anywhere, but it is most significant at the top or resistance area.

5.It shows that sellers are aggressive and managed to push the prices down.

Open
Close

Open
Close

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Bullish hammer candle –
Bullish hammer candle is a reversal candle made up of one candlestick.

1.This candle look like a hammer.

2.Bullish hammer candle consist of small body and large lower wicks.

3.They usually do not have upper wicks.

4.Bullish hammer candle is more significant when it occur at the bottom of trend or at support zones.

5.The color of candle makes no difference.

6.The longer the wick of lower side the more bullish the pattern is.

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Bearish hammer candle –
Bearish hammer candle is a reversal candle made up of one candlestick.

1.This candle is also called as Inverted hammer

2.Bearish hammer candle consist of small body and large upper wicks.

3.They usually do not have lower wicks.

4.Bearish hammer candle is more significant when it occurs at the top of trend or at resistance zones.

5.The color of candle makes no difference.

6.The longer the wick of upper side the more bearish the pattern is.

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Doji candle –
A Doji candle is a neutral candle pattern which does shows strong fight between bulls and bears: -

1.In Doji price open at a level makes highs and lows but closes near the opening price. So Doji candle have
very little to no body.

2.It’s a sign of indecision.

3.This candle provides significant information if found at the top or bottom.

4.The color of Doji candle does not matter. It can be both red and green.

5.If we see Doji candle in isolation, we see a cross like structure.

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Morning star pattern -
Morning Star is reversal pattern made up of three candles which usually forms after following a
downtrend: -

1.Here the First candle is tall bearish candle which is then followed by an indecisive (Doji) candle showing
that bears are tired and bulls starts to take control.

2.And finally the third candle is tall bullish candle closing above the median of first candle confirming that
now bulls have taken control over bears.

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Shooting star pattern –
Shooting Star is reversal pattern made up of three candles which usually forms after following an uptrend:-

1.Here the First candle is tall bullish candle which is then followed by an indecisive (Doji) candle showing
that bulls are tired and bears starts to take control.

2.Here the third candle is tall bearish candle closing below the median of first candle confirming that now
bears have taken control over bulls.

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Classified as Business