TECHNICAL ANALYSIS

Sr. No Topic Page No

1 What is a candlestick? 2

2 Bullish candlestick patterns 3

3 Bearish candlestick patterns 6

4 Neutral Candles: Dojis and others 8

5 Other Candlestick Patterns 10
6 Magic of Candlestick patterns 14

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Copyright: Maan Trading Academy, Rajkot Page No: 1 Date:12082023 Rev01

What is a candlestick?

A candlestick is a way of displaying information about an asset’s price movement and

made up of four components that are Open, High, Low and Close. Candlestick charts are

one of the most popular components of technical analysis.

It has three basic features:

• The body, which represents the open-to-close range

• The wick, or shadow, that indicates the day (time frame) high and low.

• The colour, A green body indicates a price increase, while a red body shows a

price decrease.

Copyright: Maan Trading Academy, Rajkot Page No: 2 Date:12082023 Rev01

Bullish candlestick patterns

There are many candlestick patterns, which act as useful indicators for traders looking

to make price movement predictions.

Bullish engulfing

The bullish engulfing pattern is formed of two candlesticks. The first candle is a red body

that is completely engulfed by a larger green candle.

Copyright: Maan Trading Academy, Rajkot Page No: 3 Date:12082023 Rev01

Bullish Piercing

The Bullish piercing is also a two-candle stick pattern. The close of the 2nd Bullish candle

should covers at least half of the upward length (median) of the previous bearish red

candle body.

There is more significant if gap down between the first candlestick’s closing price, and

the green candlestick’s opening.

Hammer

The hammer candlestick pattern is

formed of a short body with a long lower

wick, and it has more significance if we

found at the bottom of a downward

trend.

Copyright: Maan Trading Academy, Rajkot Page No: 4 Date:12082023 Rev01

Morning Star Candlestick

This pattern is formed by combining three candlesticks. The first candle is a bearish

candle, second candle is neutral in nature and third candle is bullish green Candle. The

close of the 3rd Bullish candle should covers at least half of the upward length (median)

of the 1st bearish red candle body.

The second candle should generally be either a doji or a spinning top or hammer

candlestick. The morning star pattern signals a reversal in the trend, from bearish to

bullish. There is more significant If morning star pattern appears at the bottom end of a

down trend.

Copyright: Maan Trading Academy, Rajkot Page No: 5 Date:12082023 Rev01

Bearish candlestick patterns

Bearish engulfing

The Bearish engulfing pattern is formed of two candlesticks. The first candle is a green

body that is completely engulfed by a larger red candle.

Bearish Piercing

The bearish piercing is also a two-candle stick pattern. The close of the 2nd bearish candle

should covers at least half of the downward length of the previous bullish green candle

body.

There is more significant if gap up between the first candlestick’s closing price, and the

second candlestick’s opening.

Copyright: Maan Trading Academy, Rajkot Page No: 6 Date:12082023 Rev01

Inverted Hammer

The inverted hammer candlestick pattern

is formed of a short body with a long

upper wick, and it has more significance

if we found at the top of the upward

trend.

Evening Star Candlestick

This pattern is formed by combining three candlesticks. The first candle is a Bullish green

candle, second candle is neutral in nature and third candle is bearish red Candle.

Copyright: Maan Trading Academy, Rajkot Page No: 7 Date:12082023 Rev01

The second candle should generally be either a doji or a spinning top or hammer

candlestick. The close of the 3rd Bearish candle should covers at least half of the

downward length (median) of the 1st bullish red candle body.

The evening star pattern signals a reversal in the trend, from bullish to bearish. There is

more significant If evening star pattern appears at the top of the uptrend.

Neutral Candles: Dojis and others

Candlestick doji is an indecision candle that has its open price equal to its close price, or
almost the same.

Doji usually have very small bodies that are seen in the form of thin lines, or they may
lack real bodies totally.

Spinning tops, patterns are formed when candlesticks have upper wick, lower wick, and
small bodies. The colour of the body does not have any major importance.

When you see spinning tops on charts, it should indicate that there is indecision between
the buyers and sellers; that is, neither of the two has been able to gain complete control
on the trend.

Copyright: Maan Trading Academy, Rajkot Page No: 8 Date:12082023 Rev01

The four main types of doji are the long-legged doji, dragonfly doji, gravestone doji, and
four price doji.

Long-legged doji, It has a long upper and lower shadow with small body.

Dragonfly doji, It is seen on charts when the open, high, and close are the same, and the
low forms a long lower shadow, It appears like a “T” having a long lower shadow
without the upper shadow or wick.

Gravestone doji, It is the opposite of the dragonfly pattern. It is seen on charts when the
open, low, and close are the same, and the high forms a long upper shadow. It appears
like an inverted “T” having a long upper shadow without the lower shadow.

Copyright: Maan Trading Academy, Rajkot Page No: 9 Date:12082023 Rev01