CANDLE

STICK
 OUR TEAM
Student name Student ID

Nguyen Phuong Anh 11200243

Nguyen Thi Minh Ngoc 11202869

Tran Ha Linh 11202869

Bui Lan Phuong 11203139

TABLE OF CONTENTS

01 INTRODUCTION

02 REVERSAL PATTERN

03 CONTINUATION PATTERN

04 USING CANDLESTICK IN
ANALYZING STOCK
 01
INTRODUCTION
DEFINITION
Candlestick chart is a type of
financial chart used to depict the
price movement of a security
based on past patterns
 STRUCTURE OF CANDLESTICK
Bullish Candlestick Bearish Candlestick

Note: A candlestick does not have to have all the ingredients as shown in the picture.
ANALYZE CANDLESTICK IN
STOCK TRADING
● The longer the candlestick body, the
stronger the buying/selling power
→ If the candlestick is green, the buyers
are overwhelming the sellers. If the
candlestick is red, the sellers are exerting
strong pressure.
● Short body → Both sides are hesitant
and undecided
● Long shadow → Both sides buy and
sell strongly
 02
REVERSAL
PATTERN
REVERSAL CANDLESTICK PATTERNS

• Appearing in the peaks, troughs, resistance,

and support areas.
• Help traders confirm the trend reversal in the
shortest time.
2.1. Bullish
reversal pattern
Usually appear at the end of a downtrend
→ Sellers narrow their activities
Buyers start to dominate the market
 Bullish Engulfing pattern

• Green, bullish
candle
• Very long body
• Red, bearish candle
covered the 1st
• Short, small body candle
 Bullish Engulfing pattern

Meaning:
• The bulls are completely taking over the market.
 Bullish Engulfing pattern

Meaning:
• The market is about to have a strong uptrend.
 Bullish Engulfing pattern

Meaning:
• Traders must look for entries to enter Buy orders to
earn more profits.
 Morning Star pattern

Strong
bearish
red
candle
 Morning Star pattern

• Doji or Spinning Top

candlestick
• Small body
Morning Star pattern

Strong bullish green

candle
 Morning Star pattern

Meaning:
• The market is about to reverse to the upside.
 Morning Star pattern

Meaning:
• Traders need to determine the appropriate entry point which
brings the highest profit.
Three White Soldiers pattern

• 3 consecutive green
candles
• The opening and
closing prices are
higher and higher
• Very short shadows
or no shadows
Three White Soldiers pattern

Meaning:
• The price will turn up
after a long period of
decline.
• The market starts to
change strongly.
2.2. Bearish
reversal pattern
 Bearish Engulfing
Bullish Bearish
candle candle
 Bearish Engulfing
Meaning:
- Candle 1 - bullish
candle (green) →
market - indecisive.
- The lower the
second candle, the
stronger the reversal
signal.
Three Black Crows

The opening
price: above or
equal to the
closing price of
the previous
candle.

- Long body
- Shadow: no/very short
 Three Black Crows

Meaning: the beginning of a downtrend, as sellers

outpaced buyers for three consecutive trading days.
 Evening Star
Bullish
candle
Evening Star
Doji/spinning
top candle
Evening Star

Strong bearish candle

 Evening Star

Meaning: a reversal of an uptrend and is especially strong

when the third candle erases the advance of the 1st candle.
03
CONTINUATION
PATTERN
 Bullish Harami

Bullish Very short

candle > body and
2nd one candle length
(bullish/
bearish)
 Bullish Harami

Shows
strong
buying, a Buying forces =
closing price selling forces
higher than → Hesitation
the opening
price.
 Bearish Harami

Bearish Short body

> 2nd one and short
length (can be
bullish or
bearish)
 Bearish Harami

Shows
strong selling Buying forces
→ By the = selling forces
close, the → Hesitation
price will
drop.
 Rising Three Method

Bullish
candle,
large size
 Rising Three Method
• Bearish
• Small range
• Closing price
< previous candle.
Rising Three Method

• Bullish candle
• Large body
• Closing price
> 1st candle.
 Rising Three Method
Very strong buying force when the door
price increases strongly compared to the
opening price.
 Rising Three Method
Sold out to take profit
Price increase ----------------> Decrease
Rising Three Method

Price dropped to
a certain level,
buying power is
strong again
→ new price
high
 Falling Three Method

Large,
bearish
candle
 Falling Three Method

• Bullish
• Small range
• Closing price
< previous
candle
Falling Three Method
• Bearish candle
• Large body
• Closing price < 1st candle
 Falling Three Method

Showed strong selling

→ Closing price to
drop sharply.
 Falling Three Method

- Price falls
→ demand
increases
→ price rises
- Short-selling or
continue to sell
→ rally not too
strong
Falling Three Method

Selling became strong

→ Price drop
 04
USING CANDLESTICK
IN ANALYZING STOCKS
- Red long-body candles: strong
selling pressure
- Behavioral analysis: selling
- In fact: strong bullish sessions
right after
⇒ Pulling out to sell at high prices
Conclusions:
LCG stock cannot increase in price
immediately, expected to
continue moving sideways
around the current price range,
then decrease
 THANK
YOU!

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