Tuesday, September 1, 2009

Technical Analysis - III


Continuing from the previous postings, today I am posting
Bearish Candle Stick Patterns.

1. Plain Black Candle (with or without sticks)

This is a bearish line. It occurs when prices open near the high and close significantly lower near the period's low



2. Hanging Man

These lines are bearish if they occur after a significant uptrend. If this pattern occurs after a significant downtrend, it is called a Hammer. They are identified by small real bodies (i.e., a small range between the open and closing prices) and a long lower shadow (i.e., the low was significantly lower than the open, high, and close). The bodies can be empty or filled-in



3
. Bearish Piercing
This is a bearish pattern. The pattern is more significant if the second line's body is below the center of the previous line's body (as illustrated)



4. Bearish Engulf
This pattern is strongly bearish if it occurs after a significant up-trend (i.e., it acts as a reversal pattern). It occurs when a small bullish (empty) line is engulfed by a large bearish (filled-in) line



5. Evening Star

This is a bearish pattern signifying a potential top. The "star" indicates a possible reversal and the bearish (filled-in) line confirms this. The star can be empty or filled in.



6 Shooting Star

This pattern suggests a minor reversal when it appears after a rally. The star's body must appear near the low price and the line should have a long upper shadow.





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