Pathshala

6. Trend Lines

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Trend Lines</h1>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Trend lines are probably the most common form of technical analysis. They are probably one of the most underutilized ones as well. If drawn correctly, they can be as accurate as any other method. Unfortunately, most traders don't draw them correctly or try to make the line fit the market instead of the other way around.<u> </u>In their most basic form, an uptrend line is drawn along the bottom of easily identifiable support areas (valleys). In a downtrend, the trend line is drawn along the top of easily identifiable resistance areas (peaks). </span>
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How do you draw trend lines?</h2>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">To draw trend lines properly, all you have to do is locate two major tops or bottoms and connect them. </span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">What's next? </span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Nothing.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Uhh, is that it?</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Yep, it's that simple. </span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Here are trend lines in action! Look at those waves!</span><br />
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Types of Trends</h2>
<span style="font-family: "arial" , "helvetica" , sans-serif;">There are three types of trends:</span>
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<li><b><span style="font-family: "arial" , "helvetica" , sans-serif;">Uptrend (higher lows)</span></b></li>
<b><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></b>
<li><b><span style="font-family: "arial" , "helvetica" , sans-serif;">Downtrend (lower highs)</span></b></li>
<b><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></b>
<li><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Sideways trends (ranging)</b>  </span><br /><h2 style="text-align: justify;">
Here are some important things to remember about trend lines:</h2>
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<li><span style="font-family: "arial" , "helvetica" , sans-serif;">It takes at least two tops or bottoms to draw a valid trend line but it takes THREE to confirm a trend line.</span></li>
<li><span style="font-family: "arial" , "helvetica" , sans-serif;">The STEEPER the trend line you draw, the less reliable it is going to be and the more likely it will break.</span></li>
<li><span style="font-family: "arial" , "helvetica" , sans-serif;">Like horizontal support and resistance levels, trend lines become stronger the more times they are tested.</span></li>
<li><span style="font-family: "arial" , "helvetica" , sans-serif;">And most importantly, <b>DO NOT EVER</b> draw trend lines by forcing them to fit the market. If they do not fit right, then that trend line isn't a valid one! </span><h1>
Follow the trend for profitable trading</h1>
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<b>Advantages:</b> By following the trend, you will not be affected by:</div>
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- Performance of companies<br />
- EPS, PE, RONW and other ratios<br />
- Elections, budgets, GDP<br />
- FII inflows, crude oil prices<br />
- Interest rates and inflation<br />
- Newspaper reports and analyst talks<br />
- Intra-day fluctuations and volatility</div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><b>The easiest and safest way to earn excellent profits consistently is to simply follow the trend and trade. </b></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">By following the trend, you will always be on the "right" side of the market. Trend analysis helps distinguish emotional decisions ("I think it's time to sell...") from analytical decisions ("I will hold until the current rising trend is broken"). Trend analysis will also discourage you from going short in a bullish market or going long in a bearish market. </span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">What is a trend</span></h2>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">A trend is simply, the persistence of a security's price to move in a particular direction. A trend can be bullish, bearish or flat. Also, a trend is in effect till it is reversed. Markets are either bullish, bearish or flat. However markets never go up or down in a straight line. There are always corrections (in bullish markets) and pullbacks or relief rallies (in bearish markets). By identifying trends and reversals, you can enter and exit trends at the correct time and earn excellent profits with minimum risks.</span><br />
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Trend Lines Trend lines are probably the most common form of technical analysis. They are probably one of the most underutilized ones ...

7. Channels

9:01 PM NBIG

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Channels</h1>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">If we take this trend line theory one step further and draw a parallel line at the same angle of the uptrend or downtrend, we will have created a channel. No, we're not talking about ESPN, ABC, or Cartoon Network.</span><span style="font-family: "arial" , "helvetica" , sans-serif;"></span><span style="font-family: "arial" , "helvetica" , sans-serif;"> Still, this doesn't mean that you should walk away like it's a commercial break- channels can be just as exciting to watch as America's Next Top Model or Entourage! </span>

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<span style="font-family: "arial" , "helvetica" , sans-serif;">Channels are just another tool in technical analysis which can be used to determine good places to buy or sell. Both the tops and bottoms of channels represent potential areas of support or resistance.</span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif;">To create an up (ascending) channel, simply draw a parallel line at the same angle as an uptrend line and then move that line to position where it touches the most recent peak. This should be done at the same time you create the trend line.</span><span style="font-family: "arial" , "helvetica" , sans-serif;"></span><span style="font-family: "arial" , "helvetica" , sans-serif;"> To create a down (descending) channel, simply draw a parallel line at the same angle as the downtrend line and then move that line to a position where it touches the most recent valley. This should be done at the same time you create the trend line.</span><span style="font-family: "arial" , "helvetica" , sans-serif;"> When prices hit the bottom trend line, this may be used as a buying area. When prices hit the upper trend line, this may be used as a selling area. </span>

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Types of channels</h2>
<b><span style="font-family: "arial" , "helvetica" , sans-serif;">There are three types of channels:</span></b><br />
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<li><b><span style="font-family: "arial" , "helvetica" , sans-serif;">Ascending channel (higher highs and higher lows)</span></b></li>
<li><b><span style="font-family: "arial" , "helvetica" , sans-serif;">Descending channel (lower highers and lower lows)</span></b></li>
<li><b><span style="font-family: "arial" , "helvetica" , sans-serif;">Horizontal channel (ranging)</span></b></li>
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Important things to remember about trend lines:</h2>
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<li><span style="font-family: "arial" , "helvetica" , sans-serif;">When constructing a channel, both trend lines must be parallel to each other. </span></li>
<li><span style="font-family: "arial" , "helvetica" , sans-serif;">Generally, the bottom of channel is considered a buy zone while the top of channel is considered a sell zone.</span></li>
<li><span style="font-family: "arial" , "helvetica" , sans-serif;">Like in drawing trend lines, <b>DO NOT EVER</b> force the price to the channels that you draw! A channel boundary that is sloping at one angle while the corresponding channel boundary is sloping at another is not correct and could lead to bad trades.</span></li>
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Channels 7 Important things to remember about trend lines 7/B Types of channels 7/A 7. Channels

Channels If we take this trend line theory one step further and draw a parallel line at the same angle of the uptrend or downtrend, we...

8. Trading the Lines

9:14 PM NBIG

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Trading the Lines</h1>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Now that you know the basics, it's time to apply these basic but extremely useful technical tools in your trading. Because here  we want to make things easy to understand, we have divided trading support and resistance levels into two simple ideas: the Bounce and the Break. </span></div>
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The Bounce</h2>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">As the name suggests, one method of trading support and resistance levels is right after the bounce. </span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjl50XOAr4FKkKi3MctkPY5On_7HkbXmSEQe9JavnZhxAfM_g3zDDIZCYTRpLQaQQSOxM0Ij5mLUKbFAIXIB9flbQILwgAwGjpsxSupgXLhnaW43SqQN-zVrT4dz3UaMlWAyIFSMh3tzdE/s1600/grade1-bounce-trampoline.png" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="210" data-original-width="170" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjl50XOAr4FKkKi3MctkPY5On_7HkbXmSEQe9JavnZhxAfM_g3zDDIZCYTRpLQaQQSOxM0Ij5mLUKbFAIXIB9flbQILwgAwGjpsxSupgXLhnaW43SqQN-zVrT4dz3UaMlWAyIFSMh3tzdE/s200/grade1-bounce-trampoline.png" width="161" /></a><span style="font-family: "arial" , "helvetica" , sans-serif;">Many retail traders make the error of setting their orders directly on support and resistance levels and then just waiting to for their trade to materialize. </span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">Sure, this may work at times but this kind of trading method assumes that a support or resistance level will hold without price actually getting there yet. </span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">You might be thinking, "Why don't I just set an entry order right on the line? That way, I am assured the best possible price." </span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><b>When playing the bounce we want to tilt the odds in our favor and find some sort of confirmation that the support or resistance will hold. </b></span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif;">For example, Instead of simply buying or selling right off the bat, wait for it to bounce first before entering. </span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif;">If you’ve been looking to go short, you want to wait for it bounce off resistance before entering.</span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif;">By doing this, you avoid those moments where price moves fast and break through support and resistance levels. From experience, catching a falling knife can get really bloody...</span></div>
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The Break</h2>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">In a perfect world, support and resistance levels would hold forever, Nifty would be healthy, and we'd all have Sensex. In a perfect trading world, we could just jump in and out whenever price hits those major support and resistance levels and earn loads of money. The fact of the matter is that these levels break... often. </span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">So, it's not enough to just play bounces. You should also know what to do whenever support and resistance levels give way! There are two ways to play breaks: the aggressive way or the conservative way. </span></div>
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The Aggressive Way<span style="font-family: "arial" , "helvetica" , sans-serif;"> <div class="separator" style="clear: both; text-align: center;">
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<span style="font-weight: normal;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The simplest way to play breakouts is to buy or sell whenever price passes convincingly through a support or resistance zone. </span></span></div>
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<span style="font-weight: normal;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The key word here is convincingly because we only want to enter when price passes through a significant support or resistance level with ease.</span></span></div>
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<span style="font-weight: normal;"><span style="font-family: "arial" , "helvetica" , sans-serif;">We want the support or resistance area to act as if it just received a Chuck Norris karate chop: We want it to wilt over in pain as price breaks right through it.</span></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhPpbtADLe5Y9ToHBiJ8_RYKD6NMCQ_5_26pGtazaRHQZ7_TyDcknvPzWAP-h7BxEO-44-CSdgJjMsKonO6ab1D97kJm3ecCZvFSWyjoNmQ9LxNOizggOc34pwykiPNBX6-S5LXA0UliA/s1600/grade1-break-aggressive.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="241" data-original-width="451" height="170" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhPpbtADLe5Y9ToHBiJ8_RYKD6NMCQ_5_26pGtazaRHQZ7_TyDcknvPzWAP-h7BxEO-44-CSdgJjMsKonO6ab1D97kJm3ecCZvFSWyjoNmQ9LxNOizggOc34pwykiPNBX6-S5LXA0UliA/s320/grade1-break-aggressive.png" width="320" /></a><span style="font-weight: normal;"></span> </div>
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<h2>
The Conservative Way<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6tqRQmYzZgTuqdiJS6Bt2LPuZVgYoYVgqopwEqxu-2EKyEBHBrGU4ldJwe4lt2-nMT9BJ-nG_YN8DkRoQ2AVbsoEHGec3iv5OAxURYV8iFND6joxy051Ny73g2H1yuEA_FebDqI4kbxo/s1600/main-qimg-1a0ac9762b44460fb8e0da41fe64e38b-c.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="546" data-original-width="602" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6tqRQmYzZgTuqdiJS6Bt2LPuZVgYoYVgqopwEqxu-2EKyEBHBrGU4ldJwe4lt2-nMT9BJ-nG_YN8DkRoQ2AVbsoEHGec3iv5OAxURYV8iFND6joxy051Ny73g2H1yuEA_FebDqI4kbxo/s320/main-qimg-1a0ac9762b44460fb8e0da41fe64e38b-c.jpg" width="320" /></a></div>
</h2>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Imagine this hypothetical situation: you decided to go long INR hoping it would rise after bouncing from a support level. Soon after, support breaks and you are now holding on to a losing position, with your account balance slowly falling. </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Do you... </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<ol style="text-align: justify;">
<li><span style="font-family: "arial" , "helvetica" , sans-serif;"> Accept defeat, get the heck out, and liquidate your position?</span></li>
<span style="font-family: "arial" , "helvetica" , sans-serif;"> OR </span>
<li><span style="font-family: "arial" , "helvetica" , sans-serif;">Hold on to your trade and hope price rises up again?</span></li>
</ol>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">If your choice is the second one, then you will easily understand this type of trading method. Remember, whenever you close out a position, you take the opposite side of the trade. Closing your INR long trade at or near breakeven means you will have to short the INR by the same amount. Now, if enough selling and liquidation of losing positions happen at the broken support level, price will reverse and start falling again. This phenomenon is the main reason why broken support levels become resistance whenever they break.</span><span style="font-family: "arial" , "helvetica" , sans-serif;"></span><span style="font-family: "arial" , "helvetica" , sans-serif;"> As you would've guessed, taking advantage of this phenomenon is all about being patient. Instead of entering right on the break, you wait for price to make a "pullback" to the broken support or resistance level and enter after the price bounces. </span><br />
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<div style="text-align: justify;">
<b>A few words of caution... THIS DOES NOT HAPPEN ALL THE TIME. "RETESTS" OF BROKEN SUPPORT AND RESISTANCE LEVELS DO NOT HAPPEN ALL THE TIME. THERE WILL BE TIMES THAT PRICE WILL JUST MOVE IN ONE DIRECTION AND LEAVE YOU BEHIND. BECAUSE OF THIS, ALWAYS USE STOP LOSS ORDERS AND NEVER EVER HOLD ON TO A TRADE JUST BECAUSE OF HOPE.  </b><br />
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The Aggressive Way 8/C The Bounce 8/A The Break 8/B The Conservative Way 8/D Trading the Lines 8 8. Trading the Lines

Trading the Lines Now that you know the basics, it's time to apply these basic but extremely useful technical tools in your tradin...

9. Summary: Support and Resistance, Trend Lines, Channels

9:19 PM NBIG

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<h3 style="text-align: left;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Summary<span style="font-family: "arial" , "helvetica" , sans-serif;"> of</span> Support and Resistance Trend Lines, Channels </span></h3>
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<img border="0" height="388" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi3OI9a4Fbhn80tGl8e7nq1DMK0svMm-11S_kKrQUcTTxn8bREtTtuca1-gx_Z4qecg5tOfSde6cURdzWzAsrvxJk3OrMt0nB7XW3l7GO53xdSsI8eWgCW41tqZF8BCWn7HnoCrHxDmYKo/s640/channel.png" width="640" /></div>
<h1>
</h1>
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</div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">When the market moves up and then pulls back, the highest point reached before it pulls back is now resistance. </span><br />
<br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">As the market continues up again, the lowest point reached before it climbs back is now support.<b> </b> </span><br />
<br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">One thing to remember is that horizontal support and resistance levels are not exact numbers. </span><br />
<br />
<b><span style="font-family: "arial" , "helvetica" , sans-serif;">To help you filter out these false breakouts, you should think of 
support and resistance more of as "zones" rather than concrete numbers. </span></b><br />
<br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">One way to help you find these zones is to plot support and resistance on a line chart rather than a candlestick chart. </span><br />
<br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">Another thing to remember is that when price passes through a 
resistance level, that resistance could potentially become support. </span><br />
<br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">The 
same could also happen with a support level. If a support level is 
broken, it could potentially become a resistance level </span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg3wj1bRz-RC0NFOdNbIybG0VBVbEeTfRIzZc7Cw_NSzta6WlQjaePsuA6Q_LkGn8uImdrJivFCRJstTJfK3UbuXAk_zPqEx5fxd7tfIXZjv4rIIvk5zJnBciXiBOvuIZmApAlwP797EsQ/s1600/summary-support-and-resistance.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="350" data-original-width="515" height="217" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg3wj1bRz-RC0NFOdNbIybG0VBVbEeTfRIzZc7Cw_NSzta6WlQjaePsuA6Q_LkGn8uImdrJivFCRJstTJfK3UbuXAk_zPqEx5fxd7tfIXZjv4rIIvk5zJnBciXiBOvuIZmApAlwP797EsQ/s320/summary-support-and-resistance.png" width="320" /></a></div>
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<h2>
Trend Lines</h2>
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<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">In their most basic form, an uptrend line is drawn along the bottom 
of easily identifiable support areas (valleys). In a downtrend, the 
trend line is drawn along the top of easily identifiable resistance 
areas (peaks).</span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">

</span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">There are three types of trends: </span><br />
<ol style="text-align: justify;">
<li><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Uptrend (higher lows)</b></span></li>
<li><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Downtrend (lower highs)</b></span></li>
<li><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Sideways trends (ranging) </b></span></li>
</ol>
</div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">

</span></div>
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<h2>
Channels</h2>
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<img border="0" height="388" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOmq6-1viDBcfUuFkozEzwqTTv7WMB-7EqusF-ZJUm_S9x49ADhwIpl38USOZMaj4VktS6tI_R4P0-BMWAxZXdu1jZzWXmlUPwLLbkK03AlGe32iKLzcNwO-vL8XmOrsIRK4uHdLrggjE/s640/channel.png" width="640" /></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">To create an up (ascending) channel, simply draw a parallel line at 
the same angle as an uptrend line and then move that line to position 
where it touches the most recent peak.</span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">

</span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">To create a down (descending) channel, simple draw a parallel line at
 the same angle as the downtrend line and then move that line to a 
position where it touches the most recent valley.</span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">

</span></div>
<ol style="text-align: justify;">
<li><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Ascending channel (higher highs and higher lows)</b></span></li>
<li><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Descending channel (lower highers and lower lows)</b></span></li>
<li><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Horizontal channel (ranging)</b></span></li>
</ol>
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<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Trading support and resistance levels can be divided into two methods: the bounce and the break. </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">

</span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">When trading <b>the bounce</b> we want to tilt the odds in 
our favor and find some sort of confirmation that the support or 
resistance will hold. Instead of simply buying or selling right off the 
bat, wait for it to bounce first before entering. By doing this, you 
avoid those moments where price moves so fast that it slices through 
support and resistance levels like a knife slicing through warm butter. </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">

</span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">As for trading <b>the break</b>, there is the aggressive 
way and there is the conservative way. In the aggressive way, you simply
 buy or sell whenever the price passes through a support or resistance 
zone with ease. In the conservative way, you wait for price to make a 
"pullback" to the broken support or resistance level and enter after 
price bounces.</span></div>
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<h3 style="text-align: left;">
<span class="st"><em>Quiz Time :  </em></span><span class="st"><em>Frequently Asked</em> Questions and Answers.</span></h3>
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<h4 class="question">
<span class="label">Q:</span> In a bull market, a ____ level is an area that price has difficulty breaking through to the downside. </h4>
<h4 class="question">
<span style="color: blue;"> <span style="font-weight: normal;">A: In a bull market, a support level is an area that price has difficulty breaking through to the downside.</span></span></h4>
<h4 class="question">
<span class="label">Q:</span> When price breaks through a resistance level, it could potentially become... </h4>
<h4 class="question">
<span style="font-weight: normal;"><span style="color: blue;">A:  When the market moves up and then pulls back, the highest point 
reached before it pulled back is now resistance. As the market continues
 up again, the lowest point reached before it started back is now 
support</span>.</span></h4>
<h4 class="question">
<span class="label">Q:</span> How many tops or bottoms does it take to confirm a trend line?</h4>
<div class="question">
<span style="color: blue;"><span style="font-weight: normal;">A: It takes at least two tops or bottoms to draw a valid trend line but it takes THREE to confirm a trend line.</span></span></div>
<h4 class="question">
<span class="label">Q:</span> When drawing trend lines, you should...</h4>
<div class="question">
<span style="color: blue;"><span style="font-weight: normal;">A: DO NOT EVER draw trend lines by forcing them to fit the market. If they 
do not fit right, then that trend line isn’t a valid one!</span></span></div>
<h4 class="question">
<span class="label">Q:</span> When price is trading within a channel, what is it doing?</h4>
<div class="question">
<span style="font-weight: normal;"> </span><span style="color: blue;">A: The market is trading within a channel if price trades within two parallel trend lines.</span></div>
<h4 class="question">
<span class="label">Q:</span> A descending channel is characterized by...</h4>
<div class="question">
<span style="color: blue;"><span style="font-weight: normal;">A: A descending channel is characterized by lower highs and lower lows.</span></span></div>
<h4 class="question">
<span class="label">Q:</span> Generally, the ___ of a channel is considered to be a ____ zone.</h4>
<div class="question">
<span style="font-weight: normal;"> <span style="color: blue;">A: </span></span><span style="color: blue;">Generally, the bottom of a channel is considered to be a buy zone.</span></div>
<h4 class="question">
<span class="label">Q:</span> When trading off support and resistance levels, you generally should... </h4>
<div class="question">
<span style="color: blue;">A: When playing the bounce, we want to tilt the odds in our favor and find 
some sort of confirmation that the support or resistance will hold. 
Instead of simply buying or selling right off the bat, wait for it to 
bounce first before entering. </span></div>
<h4 class="question">
<span class="label">Q:</span> When trading the break of support or resistance levels, the conservative way would be to... </h4>
<div class="question">
<span style="color: blue;"> A: Instead of entering right on the break, you wait for price to make a 
“pullback” to the broken support or resistance level and enter after the
 price bounces.</span></div>
</div>
</div>
</div>

Channels 9 Summary: Support and Resistance Trend Lines 9. Summary: Support and Resistance, Trend Lines, Channels

Summary of Support and Resistance Trend Lines, Channels When the market moves up and then pulls back, the highest point reache...

Gaps and Gap Analysis

4:03 PM NBIG

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<h4 style="text-align: justify;">
What is a ‘Gap’ in technical analysis?</h4>
<div style="text-align: justify;">
A gap is an area on a price chart in which there were no trades. It is easy to see gaps if you take any charts. Let us try to understand gaps in another way. The fluctuations in stock prices are coherent in nature. That means that the price rises or falls gradually.  Thus, in rising scrip, if on one day the low was Rs 100 and the high was Rs 135, on the next day the low would be Rs 130 and the high Rs 140. Here, the low for the next day falls within the high-low range of the previous day. But suppose for the second day, the low was Rs 145 and the high Rs 150. Then, the low for the next day has fallen above the previous day High-Low range, or it was higher than the previous day’s high. So, when one draws bar charts showing High-Lows every day, there would be a discontinuity, termed as a ‘Gap’ in technical theory. An interesting feature of Price gaps is that it gets filled within a short amount of time. That is, the price would come back to fill the price gap of Rs 140 – Rs145, where there was no trade in the previous days.</div>
<div style="text-align: justify;">
In simple terms-a gap occurs when the current bar opens above the high or below the low of the previous bar. On a price chart, a space appears between the bars indicating the gap.</div>
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<div style="text-align: justify;">
Gaps appear more frequently on daily charts, where every day is an opportunity to create an opening gap. Gaps on weekly or monthly charts are fairly rare: the gap would have to occur between Friday's close and Monday's open for weekly charts and between the last day of the month's close and the first day of the next month's for the monthly charts. </div>
<h3>
Types of price gaps</h3>
Gaps can be subdivided into four basic categories:<br />
<ul>
<li>Common Gaps</li>
<li>Breakaway Gaps</li>
<li>Runaway Gaps and</li>
<li>Exhaustion Gaps.</li>
</ul>
<b></b>

<br />
<h3 class="sectionedit2" id="common_gaps" style="text-align: left;">
Common Gaps</h3>
Common gaps are ‘common’ and ‘uneventful’. If a Gap is formed when the markets are moving in a narrow range, it is called a Common Gap.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgkLwCRsM_afpaIA4sxdyo3oqyl2CJw2pnscUguN5yei4fSodcZ0o3DMNzMwcYMXXbWkZqWjepcNHCxcSsfnAM4b4spVL4CY9_641FYl-gZY89kAGJSR8xANCMKn9jY9hO8zZpCKpNJRCk/s1600/commongapschart2.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="301" data-original-width="520" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgkLwCRsM_afpaIA4sxdyo3oqyl2CJw2pnscUguN5yei4fSodcZ0o3DMNzMwcYMXXbWkZqWjepcNHCxcSsfnAM4b4spVL4CY9_641FYl-gZY89kAGJSR8xANCMKn9jY9hO8zZpCKpNJRCk/s1600/commongapschart2.png" /></a></div>
<h3 style="text-align: left;">
Breakaway Gaps:</h3>
<div style="text-align: justify;">
Breakaway gaps are the exciting ones. They occur when the price action is breaking out of their trading range or congestion area. To understand gaps, one has to understand the nature of congestion areas in the market. A <i>congestion area</i> is just a price range in which the market has traded for some period of time, usually a few weeks or so. The area near the top of the congestion area is usually resistance when approached from below. Likewise, the area near the bottom of the congestion area is support when approached from above. To break out of these areas requires market enthusiasm and, either, many more buyers than sellers for upside breakouts or more sellers than buyers for downside breakouts.</div>
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<br /></div>
<div style="text-align: justify;">
Volume will (should) pick up significantly, for not only the increased enthusiasm, but many are holding positions on the wrong side of the breakout and need to cover or sell them. It is better if the volume does not happen until the gap occurs. This means that the new change in market direction has a chance of continuing. The point of breakout now becomes the new support (if an upside breakout) or resistance (if a downside breakout). Don't fall into the trap of thinking this type of gap, if associated with good volume, will be filled soon. It might take a long time. Go with the fact that a new trend in the direction of the stock has taken place, and trade accordingly. Notice in the chart below how prices spent over 2 months without going lower than about 41. When they did, it was with increased volume and a downward breakaway gap.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguZLBk2TRHVuhpZ_lqU73_CAgGrcAsLJHUpPqDjJbVIfJ9Lcq8VRwmmLK87OFj1SNZNExcXAeE9rH96O2RD3qpIxfOTyttrY-wZCLbxW-WpuVdtBMARH9rHTnc1wv1LjuIUU5E50s2Pfs/s1600/breakgapchart3.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="384" data-original-width="520" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguZLBk2TRHVuhpZ_lqU73_CAgGrcAsLJHUpPqDjJbVIfJ9Lcq8VRwmmLK87OFj1SNZNExcXAeE9rH96O2RD3qpIxfOTyttrY-wZCLbxW-WpuVdtBMARH9rHTnc1wv1LjuIUU5E50s2Pfs/s1600/breakgapchart3.png" /></a></div>
<div style="text-align: justify;">
 A good confirmation for trading gaps is if they are associated with classic chart patterns. For example, if an ascending triangle suddenly has a breakout gap to the upside, this can be a much better trade than a breakaway gap without a good chart pattern associated with it. The chart below shows the normally bullish ascending triangle (flat top and rising, lower trend line) with a breakaway gap to the upside, as you would expect with an ascending triangle.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhAnPVa6Dk1_pqIMjVaJTwgwQicAPjdB25hFK7WtcSfgBxwOHRSEOFfZbemiZU6BV9tL6C8CB0nFYCZAo6Ck1ZKxer6HCcrDhWzJAHknq78IOalfkeXXhxUnpneANtsz2tOWNeo5UFkm7s/s1600/breaktranglechart4.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="301" data-original-width="520" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhAnPVa6Dk1_pqIMjVaJTwgwQicAPjdB25hFK7WtcSfgBxwOHRSEOFfZbemiZU6BV9tL6C8CB0nFYCZAo6Ck1ZKxer6HCcrDhWzJAHknq78IOalfkeXXhxUnpneANtsz2tOWNeo5UFkm7s/s1600/breaktranglechart4.png" /></a></div>
<h2 class="sectionedit4" id="runaway_gaps">
Runaway Gaps</h2>
<div style="text-align: justify;">
Runaway gaps are also called measuring gaps, and are best described as gaps that are caused by increased interest in the stock. For runaway gaps to the upside, it usually represents traders who did not get in during the initial move of the up trend and while waiting for a retracement in price, decided it was not going to happen. Increased buying interest happens all of a sudden, and the price gaps above the previous day's close. This type of runaway gap represents an almost panic state in traders. Also, a good uptrend can have runaway gaps caused by significant news events that cause new interest in the stock. In the chart below, note the significant increase in volume during and after the runaway gap.</div>
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</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxDvBsYYIFQzLll1lntXjSIXXNjmlXPdcuDBuoDkuvLqeDPBKFVKLc9hbFGDftf1xppfTqDMO2OVq_JKzKgnsS47yqAPZY6FxhcTWwQyA79ih39ZwoiGBdD9fn6FrAXkXUv_bBrxSlpm8/s1600/runawaychart5.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="384" data-original-width="520" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxDvBsYYIFQzLll1lntXjSIXXNjmlXPdcuDBuoDkuvLqeDPBKFVKLc9hbFGDftf1xppfTqDMO2OVq_JKzKgnsS47yqAPZY6FxhcTWwQyA79ih39ZwoiGBdD9fn6FrAXkXUv_bBrxSlpm8/s1600/runawaychart5.png" /></a></div>
<div style="text-align: justify;">
Runaway gaps can also happen in downtrends. This usually represents increased liquidation of that stock by traders and buyers who are standing on the sidelines. These can become very serious as those who are holding onto the stock will eventually panic and sell – but sell to whom? The price has to continue to drop and gap down to find buyers. Not a good situation.</div>
<div style="text-align: justify;">
The term <i>measuring gap</i> is also used for runaway gaps. This is an interpretation that is hard to find examples for, but it is a way of helping one decide how much longer a trend will last. The theory is that the measuring gap will occur in the middle of, or half way through, the move.</div>
<div style="text-align: justify;">
Sometimes, the futures market will have runaway gaps that are caused by trading limits imposed by the exchanges. Getting caught on the wrong side of the trend when you have these limit moves in futures can be horrifying. The good news is that you can also be on the right side of them. These are not common occurrences in the futures market despite all the wrong information being touted by those who do not understand it, and are only repeating something they read from an uninformed reporter.</div>
<h2 class="sectionedit5" id="exhaustion_gaps">
Exhaustion Gaps</h2>
<div style="text-align: justify;">
Exhaustion gaps are those that happen near the end of a good up- or downtrend. They are many times the first signal of the end of that move. They are identified by high volume and large price difference between the previous day's close and the new opening price. They can easily be mistaken for runaway gaps if one does not notice the exceptionally high volume.</div>
<div style="text-align: justify;">
It is almost a state of panic if the gap appears during a long down move where pessimism has set in. Selling all positions to liquidate holdings in the market is not uncommon. Exhaustion gaps are quickly filled as prices reverse their trend. Likewise, if they happen during a bull move, some bullish euphoria overcomes trades, and buyers cannot get enough of that stock. The prices gap up with huge volume; then, there is great profit taking and the demand for the stock totally dries up. Prices drop, and a significant change in trend occurs. Exhaustion gaps are probably the easiest to trade and profit from. In the chart, notice that there was one more day of trading to the upside before the stock plunged. The high volume was the giveaway that this was going to be, either, an exhaustion gap or a runaway gap. Because of the size of the gap and the near doubling of volume, an exhaustion gap was in the making here.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgUuYXu2QZFFd8shghP9aY_G0Qo1rhS3PldSBqXRVe0lRs9VZJAe3kJjztVnJ1euDcx1dmOfcW8M9vbSuGWcu_0mZ6gceA0zXAyyI8y_gcjk2pYiT1AKCMTYNx53Q37dU44wvF6XH0BJbE/s1600/exhaustionchart6.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="384" data-original-width="520" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgUuYXu2QZFFd8shghP9aY_G0Qo1rhS3PldSBqXRVe0lRs9VZJAe3kJjztVnJ1euDcx1dmOfcW8M9vbSuGWcu_0mZ6gceA0zXAyyI8y_gcjk2pYiT1AKCMTYNx53Q37dU44wvF6XH0BJbE/s1600/exhaustionchart6.png" /></a></div>
<h2 class="sectionedit6" id="conclusion">
Conclusion</h2>
<div class="level2">
There is an old saying that the market abhors a vacuum and all gaps will be filled. While this may have some merit for common and exhaustion gaps, holding positions waiting for breakout or runaway gaps to be filled can be devastating to your portfolio. Likewise, waiting to get on-board a trend by waiting for prices to fill a gap can cause you to miss the big move. Gaps are a significant technical development in price action and chart analysis, and should not be ignored. <i>Japanese candlestick analysis</i> is filled with patterns that rely on gaps to fulfill their objectives.<br />
<br />
<br />
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<br /></div>
</div>

Breakaway Gaps Common Gaps Exhaustion Gaps Gaps and Gap Analysis Runaway Gaps What is a ‘Gap’ Gaps and Gap Analysis

What is a ‘Gap’ in technical analysis? A gap is an area on a price chart in which there were no trades. It is easy to see gaps if you ta...

48. Helping Web Address and Books ETC

8:53 PM NBIG

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<span style="color: blue;"><span style="font-family: Arial,Helvetica,sans-serif;"><b><span style="font-size: x-large;">Bulkowski's Visual Candle Index </span></b></span></span></div>
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<span style="font-size: small;"><b><span style="background-color: yellow;"><span style="color: red;"><a href="http://thepatternsite.com/CandleEntry.html">http://thepatternsite.com/CandleEntry.html</a></span></span></b></span></div>
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<span style="color: blue;"><span style="font-size: x-large;"><b><span style="font-family: Arial,Helvetica,sans-serif;">Thomas Bulkowski - Encyclopedia of chart patterns.pdf </span></b></span></span></div>
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Helping Web Address and PDF ETC 48. Helping Web Address and Books ETC

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47. Bearish Low Reliability Candlestick Patterns

1:21 PM NBIG

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<span style="color: red;"><b><span style="font-size: large;"><span style="font-family: "arial" , "helvetica" , sans-serif;"> Bearish Low Reliability Candlestick Patterns</span></span></b></span><br />
<br />
<span style="color: red;"><span style="font-size: small;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>1. Bearish Belt Hold. 2. Bearish Hanging Man. 3. Bearish Shooting Star. </b></span></span></span><br />
<span style="color: red;"><span style="font-size: small;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>4. Bearish Harami.</b></span></span></span><br />
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<span style="font-size: large;"><span style="color: red;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b> </b></span></span></span><span style="color: red;"><span style="font-size: small;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: large;"><b><span style="color: red;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>1. Bearish Belt Hold.</b></span></span></b></span></span></span></span><br />
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<div style="text-align: justify;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgDmUK55OHSg-9-FFO90gn0HQxVdQscOc77SdEPE4ZIMTzdAnSHx0MT_Uh2Xvz6aCGjGfaguVNXMkhV_Svl_wEHo9-C8QJgbsRkFiB7uiZQRDqSjHuBb911QZItTo4m-vgSdtRiBmy0Fbc/s1600/bearishbelthold1.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgDmUK55OHSg-9-FFO90gn0HQxVdQscOc77SdEPE4ZIMTzdAnSHx0MT_Uh2Xvz6aCGjGfaguVNXMkhV_Svl_wEHo9-C8QJgbsRkFiB7uiZQRDqSjHuBb911QZItTo4m-vgSdtRiBmy0Fbc/s200/bearishbelthold1.jpg" width="148" /></a><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: small;"><b><span class="bodybldblue">Pattern:</span>  reversal<br />
 <span class="bodybldblue">Reliability:</span> low <br />
 <br />  
 
  
 <span class="bodybldblue">Identification</span></b><br />
 A black day occurs with no upper shadow and a close near the day's low.<br />
</span></span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: small;"><b><span class="bodybldblue">The Psychology</span></b><br />
 The Belt Hold occurs fairly often and is not very reliable. The fact 
that the day's opening price holds as the high of the day and the stock 
trends down all day leans bearish, but one really needs to note the 
overall trend and receive confirmation with an additional down day.</span></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhifVWPFGxWT0eIc7Y6-uW3CMTqh7TL3ejGfClnNSvK0EVT7M5CT1kUb-cTdBVuZ_Jhj7-ll-hlAb3bi7nNsCIANU4uE5I_u4GrNTDN79bUh9ob8Za1nDHuXk2NFbAD5yNHDoN2PfmakZ0/s1600/1.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="378" data-original-width="700" height="344" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhifVWPFGxWT0eIc7Y6-uW3CMTqh7TL3ejGfClnNSvK0EVT7M5CT1kUb-cTdBVuZ_Jhj7-ll-hlAb3bi7nNsCIANU4uE5I_u4GrNTDN79bUh9ob8Za1nDHuXk2NFbAD5yNHDoN2PfmakZ0/s640/1.PNG" width="640" /></a></div>
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<span style="font-size: small;"><span style="color: red; font-size: large;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>2. Bearish Hanging Man.</b></span></span></span></div>
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<div class="" style="clear: both; text-align: left;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPj-GNI-icV5ACSppsifDj9TQuGMxhTDFss4Si7RHCpHENjNMzRiIGDmDL2V-FkEmT7uKuUBJ7RBybo7Mij7bqHGBqXL7pRLnaAdisQZr7GyB0GAuv3g7KGCSRgA54_10Y7XOAGDNcsHk/s1600/hangingman1.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPj-GNI-icV5ACSppsifDj9TQuGMxhTDFss4Si7RHCpHENjNMzRiIGDmDL2V-FkEmT7uKuUBJ7RBybo7Mij7bqHGBqXL7pRLnaAdisQZr7GyB0GAuv3g7KGCSRgA54_10Y7XOAGDNcsHk/s200/hangingman1.jpg" width="149" /></a><span style="font-size: small;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b><span class="bodybldblue">Pattern:</span>  reversal<br />
 <span class="bodybldblue">Reliability:</span> low/moderate <br />
 <br />  
 
  
 <span class="bodybldblue">Identification</span></b><br />
 A small real body forms at the upper end of the trading range with a 
long lower shadow (the longer the more bearish) with no, or almost no 
upper shadow. 
 </span></span></div>
<span style="font-size: small;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b><span class="bodybldblue">The Psychology</span></b><br />
  In an uptrend or within a bounce of a downtrend, a sharp intraday 
sell-off is followed by a reversal which causes the stock to close near 
its opening price near the day's high. Although the stock recovers from 
its intraday sell-off, it suggests the bulls are starting to lose 
strength, and a reversal may occur. The pattern is a slightly more 
reliable if the real body is black. A weak following day on solid volume
 is still needed to confirm the pattern. </span></span>
  <span style="font-size: small;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br />
  The bearish Hanging Man is similar to the bullish Dragonfly Doji and bullish Hammer. 
    </span></span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhbFQ4eIL8ED_0MxTyWEBKL4-v3gtdy_yuL-dxY4iFqAr8TtT9OA7A61MbvfpDkzXsl45bRccxRGIBu_Os1DZ-yPpnmjGrDQvX3u_HCGUiZwJ8nj5TPn2lyj-WQ6VN7YpTbndwLuoNCwzc/s1600/3.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="378" data-original-width="700" height="344" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhbFQ4eIL8ED_0MxTyWEBKL4-v3gtdy_yuL-dxY4iFqAr8TtT9OA7A61MbvfpDkzXsl45bRccxRGIBu_Os1DZ-yPpnmjGrDQvX3u_HCGUiZwJ8nj5TPn2lyj-WQ6VN7YpTbndwLuoNCwzc/s640/3.PNG" width="640" /></a></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Bearish Hanging Man candles form very often so you need to use other 
indicators to confirm potential moves. Here BBBY formed a Hanging Man 
candle that was followed up by a bearish Engulfing stick. That's a good 
one-two combination to play. </span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhq6qXZztoKZnRlTAgBIs4pEjSyzwtrD9gPMx5uxL0MSpnXdcIxkkcTdPWZKFovmdevWbSIw24rwHX_GSc9FukveJrG-LVIfQC5yAaicq7A_enzdvhiPQIuZxR4nDqE3DpBZOYLc3S1teU/s1600/4.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="378" data-original-width="700" height="344" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhq6qXZztoKZnRlTAgBIs4pEjSyzwtrD9gPMx5uxL0MSpnXdcIxkkcTdPWZKFovmdevWbSIw24rwHX_GSc9FukveJrG-LVIfQC5yAaicq7A_enzdvhiPQIuZxR4nDqE3DpBZOYLc3S1teU/s640/4.PNG" width="640" /></a></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">After making a higher high DPH formed a bearish Hanging Man candle on 
strong volume and was followed a filled candle that confirmed the 
reversal of the uptrend.  </span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhhfm_XCl3yQ06rEa7l3XmqFKsTAEv2_R19fApRq_CkeI3lqsLMr0YahVWti-TTJH4NSJyumjA3Ic0Pz85tiDz550uNcRkASNr6NzqbVZwzuq8adz9L2Ao0IPIu8KfPhWyiec2TN3LUkKg/s1600/5.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="378" data-original-width="700" height="344" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhhfm_XCl3yQ06rEa7l3XmqFKsTAEv2_R19fApRq_CkeI3lqsLMr0YahVWti-TTJH4NSJyumjA3Ic0Pz85tiDz550uNcRkASNr6NzqbVZwzuq8adz9L2Ao0IPIu8KfPhWyiec2TN3LUkKg/s640/5.PNG" width="640" /></a></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"> Here is a bearish Hanging Man candle that would be best used to exit a 
long position rather than as a short entry. The stock is simply too 
strong to short unless you are a very slick short term trader. </span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: red;"><span style="font-size: small;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>3. Bearish Shooting Star. </b></span></span></span></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPWT6W9TaakfMfqWNeT0R60WVyJoY9bmE0x99dqIiqGmmsilQ7VMsGxu6xWXyBDVu966yIQ97IcNlrYweVLa442OtKN4I91xLqyqdCloKUFj8dfOCxzzoVJGVoM7cvWV0dvrwpTGa8DRc/s1600/shootingstar2.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPWT6W9TaakfMfqWNeT0R60WVyJoY9bmE0x99dqIiqGmmsilQ7VMsGxu6xWXyBDVu966yIQ97IcNlrYweVLa442OtKN4I91xLqyqdCloKUFj8dfOCxzzoVJGVoM7cvWV0dvrwpTGa8DRc/s200/shootingstar2.jpg" width="150" /></a><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: small;"><b><span class="bodybldblue">Pattern:</span>  reversal<br />
 <span class="bodybldblue">Reliability:</span> low/moderate <br />
 <br />  
 
  
 <span class="bodybldblue">Identification</span></b><br />
 A small body forms at the lower end of the trading range. The upper 
shadow is usually long while the lower shadow is small or almost 
nonexistent. 
 <br /> </span></span></div>
<span style="font-family: "arial" , "helvetica" , sans-serif;"><b><span class="bodybldblue">The Psychology</span></b><br />
  In an uptrend or within a bounce of a downtrend, the stock gaps up. A 
valid attempt is made to rally the stock, but the strength subsides and 
the stock falls to close near the day's low and near its opening price. 
Failure to follow through with strength suggests the bulls may be losing
 strength. Although this is not necessarily extremely bearish, it is 
less bullish, so stops should be moved up or profits taken on longs. For
 a reversal to occur a weak day is needed to confirm the pattern. </span>
  <span style="font-family: "arial" , "helvetica" , sans-serif;"><br />
  The bearish Shooting Star is similar to the bullish <span style="color: black;">Inverted Hammer, bearish Gravestone Doji, and bullish Gravestone Doji. </span></span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinVvCM1UqoByzram_tiNnWfzSQaTbamMBHrUp7xHGQvrBkRYy4H3_wNj9KVyVBR7ILC32zs25qWw810IlcS7LsOb755lpfKbVYU4nNVN87558C3leORwStf9T8YmIQFqCbyDNeGUdwloQ/s1600/6.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="378" data-original-width="700" height="344" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinVvCM1UqoByzram_tiNnWfzSQaTbamMBHrUp7xHGQvrBkRYy4H3_wNj9KVyVBR7ILC32zs25qWw810IlcS7LsOb755lpfKbVYU4nNVN87558C3leORwStf9T8YmIQFqCbyDNeGUdwloQ/s640/6.PNG" width="640" /></a></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"> Here is an example of how a bearish Shooting Star can be used to pick 
the top of a range. BMY was trading aimlessly without much conviction in
 either direction, so a buying the bottom and selling and selling short 
the top would provide profits for the patient trade. After the stock 
bounced from 25 to over 27, it was a Shooting Star candle that signaled 
the top</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZ0iDO4ZGUhRsuCxyij3Lc9WsuAmbgi8SurBwbhBtBkFx0VZFXelW5Pjj0Rb-1YZ5TFaJEmllcCkZ0xyeuY2XEEQ7cFfOMQ5pEjNPLUxNAlpEyGLOBZ8d88qT9lFbZWpuZsb1UDOeNVOM/s1600/7.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="378" data-original-width="700" height="344" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZ0iDO4ZGUhRsuCxyij3Lc9WsuAmbgi8SurBwbhBtBkFx0VZFXelW5Pjj0Rb-1YZ5TFaJEmllcCkZ0xyeuY2XEEQ7cFfOMQ5pEjNPLUxNAlpEyGLOBZ8d88qT9lFbZWpuZsb1UDOeNVOM/s640/7.PNG" width="640" /></a></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Shorting a Shooting Star pattern at the end of a high volume rally is 
very risky, but if the candle forms at resistance (notice 17 was the 
previous high) like it did here with NEOF, the reliability of a 
successful reversal significantly increases. </span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiFCj88Lyc1fsVqwXm3nrB5EAYjVAiJAPQ7sTit11gyN9INv9lnjUlm1EPJVlbzbz7inYyUOC7ofhvtmXvHVlncmRyx3LCcz0vDaOJM_fzRnD1GNRhjR2Mw94z_hASPelGKpPwzU8t4rrw/s1600/8.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="378" data-original-width="700" height="344" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiFCj88Lyc1fsVqwXm3nrB5EAYjVAiJAPQ7sTit11gyN9INv9lnjUlm1EPJVlbzbz7inYyUOC7ofhvtmXvHVlncmRyx3LCcz0vDaOJM_fzRnD1GNRhjR2Mw94z_hASPelGKpPwzU8t4rrw/s640/8.PNG" width="640" /></a></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Here's a risky play. DCLK was in a good uptrend when it formed a bearish
 Shooting Star candle. It's a sign that longs should look to take some 
money off the table, but only aggressive traders should look to short 
such a strong stock.</span>  </div>
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<span style="font-size: large;"><span style="font-family: "arial" , "helvetica" , sans-serif;"> </span><span style="color: red;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>4. Bearish Harami.</b></span></span></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhxkrJ_OUEqHvhevZA0ysNZ7aSX_NvFdC0375kE6T3YUIP19K5_o-H-IK6MtY92G82txff1DElDOjIhsp3R0yYYUd-6zBw0ZH8cjHu1oNOhPyDnGqbq12qLV-h-DexSNzUOI08PpqzOwxg/s1600/bearishharami.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhxkrJ_OUEqHvhevZA0ysNZ7aSX_NvFdC0375kE6T3YUIP19K5_o-H-IK6MtY92G82txff1DElDOjIhsp3R0yYYUd-6zBw0ZH8cjHu1oNOhPyDnGqbq12qLV-h-DexSNzUOI08PpqzOwxg/s200/bearishharami.jpg" width="148" /></a><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: small;"><b><span class="bodybldblue">Pattern:</span>  reversal<br />
 <span class="bodybldblue">Reliability:</span> low <br />
 <br />  
 
  
 <span class="bodybldblue">Identification</span></b><br />
 A long white day is followed by a black day that gaps down and is completely engulfed by the real body of the first day. <br /> </span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: small;"><b><span class="bodybldblue">The Psychology</span></b><br />
  In an uptrend or within a bounce of a downtrend a long white day 
occurs. The next day's gap down comes as a surprise to bulls who thought
 they were sitting on a great position the previous day. Reliability of 
the bearish Harami is low, so a weak following day is needed for 
confirmation. </span></span>
  <span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: small;"><br />
  The bearish Harami could be the first two days of bearish <span style="color: black;">Three Inside Down. </span></span></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdvHXgPtlvgK7mLaJHKWpV5-kX_ELF533OW2RB5QzynYlkKt2SazloG1CzR1c4t85tRcWz6g7Ra0ftEcczP0ONzs__gwRbwvktaN75bDGbtarElVY7O9pkYwrLMQOXB2VineKHXaE3h_s/s1600/9.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="378" data-original-width="700" height="344" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdvHXgPtlvgK7mLaJHKWpV5-kX_ELF533OW2RB5QzynYlkKt2SazloG1CzR1c4t85tRcWz6g7Ra0ftEcczP0ONzs__gwRbwvktaN75bDGbtarElVY7O9pkYwrLMQOXB2VineKHXaE3h_s/s640/9.PNG" width="640" /></a></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Bearish Harami formations carry low reliability but when they occur at 
resistance like with APH, reliability increases and the risk/reward 
tradeoff shifts to a more favorable level.  </span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjzEOSB1lj0p0_8CKGiZM9yzCxHYX-Sw8GZ8bXrhChJ3OoK3p7jdx__XgF6vHE8CxwvGgJdU-x5shhQJL6UjbmbBPMVpLr4IPZSFMNq_xtPav4PPIVtwNCGxbdM3-LuxzT9cRGUhPrzvA8/s1600/10.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="378" data-original-width="700" height="344" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjzEOSB1lj0p0_8CKGiZM9yzCxHYX-Sw8GZ8bXrhChJ3OoK3p7jdx__XgF6vHE8CxwvGgJdU-x5shhQJL6UjbmbBPMVpLr4IPZSFMNq_xtPav4PPIVtwNCGxbdM3-LuxzT9cRGUhPrzvA8/s640/10.PNG" width="640" /></a></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Here is an example of a bearish Harami forming right at resistance. This
 situation offers the safest entry on the short side because your risk 
to the upside is small while your potential gain is great because the 
stock will likely trade back to support. </span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjulQO2VdInsUYnMPJaB0gU6fQsmXBX3WwKF4d3Z_1VQhLdUFw1PfqK1l5DOtMOfkfFN1bClD3hrktJXO2Johy62U9Mz0s1tbzvaKGIU2hQeRO_tyWIUSp1h2XyOB2Mi3sWX63Uzkte5bk/s1600/11.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="378" data-original-width="700" height="344" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjulQO2VdInsUYnMPJaB0gU6fQsmXBX3WwKF4d3Z_1VQhLdUFw1PfqK1l5DOtMOfkfFN1bClD3hrktJXO2Johy62U9Mz0s1tbzvaKGIU2hQeRO_tyWIUSp1h2XyOB2Mi3sWX63Uzkte5bk/s640/11.PNG" width="640" /></a></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">AA also formed a bearish Harami at resistance. Notice the lack of volume
 on the rally up to the previous high. That's hint #1 that the stock has
 limited upside potential. When the stock got rejected and dropped on 
big volume and then gapped down the next day, the Harami candle was 
confirmed, and the stock did indeed reverse course. </span><span style="font-family: arial, helvetica, sans-serif; text-align: center;">  </span></div>
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Bearish Low Reliability Candlestick Patterns 47. Bearish Low Reliability Candlestick Patterns

Bearish Low Reliability Candlestick Patterns 1. Bearish Belt Hold. 2. Bearish Hanging Man. 3. Bearish Shooting Star. 4. Bearish Harami...

46. Bearish Medium Reliability Candlestick Patterns

10:11 PM NBIG

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<span style="font-size: large;"><b><u><span style="color: red; font-family: "arial" , "sans-serif";">Bearish Medium Reliability Candlestick Patterns</span></u></b></span></div>
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<div style="margin-left: .5in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -.25in;">
<span style="color: blue;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-list: Ignore;">1.<span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> </span></span>Bearish Dragonfly Doji<span style="mso-list: Ignore;">   2.<span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;">  </span></span>Bearish Long legged Doji<span style="mso-list: Ignore;">   3.<span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;">  </span></span>Bearish Engulfing</span></b></span></div>
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<span style="color: blue;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-list: Ignore;">4.<span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;">  </span></span>Bearish Gravestone Doji<span style="mso-list: Ignore;">  5.<span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> </span></span>Bearish Doji Star<span style="mso-list: Ignore;">  6.<span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> </span></span>Bearish Harami Cross<span style="mso-list: Ignore;">  </span></span></b></span></div>
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<span style="color: blue;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-list: Ignore;">7.<span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> </span></span>Bearish Meeting Lines<span style="mso-list: Ignore;">  8.<span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;">  </span></span>Bearish Advance Block <span style="mso-list: Ignore;"> 9.<span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> </span></span>Bearish Deliberation<span style="mso-list: Ignore;"> </span></span></b></span></div>
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<span style="color: blue;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-list: Ignore;">10.<span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;">  </span></span>Bearish
Try Star<span style="mso-list: Ignore;">  11.<span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> </span></span>Bearish
Two Crows<span style="mso-list: Ignore;">  12.<span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;">  </span></span>Bearish
Breakaway</span></b></span></div>
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<span style="color: magenta;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;"> <span style="mso-list: Ignore;"> </span></span></b></span></div>
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<span style="color: red;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b><span style="font-size: large;">1.<span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-size-adjust: none; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> </span>Bearish Dragonfly Doji</span></b></span></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhu3NwUngpidkw12kyiYli-UIFDr6cudSi2ifyW6z7ZMg2qj7ZFKEKclfuxeighDDes55lGACQPoXhojdBv7Zs5Y73mL8nPK-GZCnkiKZLg2CGo5i9w-MVtnKkO5jbitsWJsfgzWDYVxME/s1600/27FIG.gif" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="251" data-original-width="250" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhu3NwUngpidkw12kyiYli-UIFDr6cudSi2ifyW6z7ZMg2qj7ZFKEKclfuxeighDDes55lGACQPoXhojdBv7Zs5Y73mL8nPK-GZCnkiKZLg2CGo5i9w-MVtnKkO5jbitsWJsfgzWDYVxME/s200/27FIG.gif" width="199" /></a><span style="color: red;"><span style="font-family: "arial" , "helvetica" , sans-serif;"></span></span><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: small;"><span class="bodybldblue">   <b>       Pattern:</b></span><b> reversal <span class="bodybldblue"> </span></b></span></span></div>
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<b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: small;"><span class="bodybldblue">          Reliability:</span> low/moderate <span class="bodybldblue"> </span></span></span></b></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: small;"><span class="bodybldblue">          <b>Identification</b></span><b> </b></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: small;">          A Doji forms at the upper end of a trading range with a long  lower shadow (the longer the more bearish) with no, or almost no upper 
shadow.</span><b><span style="font-size: large;"> 
 </span></b></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><b><span class="bodybldblue">The Psychology</span></b><br />
 In an uptrend or within a bounce of a downtrend, a sharp intraday 
sell-off is followed by a reversal which causes the stock to close at 
its opening price near the day's high. Although the stock recovers from 
its intraday sell-off, it suggests the bulls are starting to lose 
strength, and a reversal may occur. A weak following day on solid volume
 is still needed to confirm the pattern. 
 <br />
 <br />
 The bearish Dragonfly Doji is similar to the bearish Hanging Man, bullish Dragonfly Doji, and bullish Hammer. </span></div>
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<span style="color: red;"><span style="font-size: large;">2. <b>BEARISH LONG LEGGED DOJI </b></span></span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEig1_ijAA3OkCcYjJ2zv9_Lh2e6DjE8bVttFBeaXckUE0_o-5puNpYSaez7uq2FDyHdd_YY65jZhjOfR3nLwL1SGcC5yQSEd6A9Wt-kbpNTD-jI4BHlZcl72Z6nBFgwMty-J4wrbs8VHow/s1600/2.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="200" data-original-width="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEig1_ijAA3OkCcYjJ2zv9_Lh2e6DjE8bVttFBeaXckUE0_o-5puNpYSaez7uq2FDyHdd_YY65jZhjOfR3nLwL1SGcC5yQSEd6A9Wt-kbpNTD-jI4BHlZcl72Z6nBFgwMty-J4wrbs8VHow/s1600/2.png" /></a><span style="font-family: "arial"; font-size: small;"><span style="font-family: "arial"; font-size: small;"><br /></span></span>
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<span style="font-family: "arial"; font-size: small;"><br /></span>
<span style="font-family: "arial"; font-size: small;">Type:</span><span style="font-family: "arial"; font-size: small;"><strong>Reversal</strong></span><br />
<span style="font-family: "arial"; font-size: small;">Relevance:</span><span style="font-family: "arial"; font-size: small;"><strong>Bearish</strong></span><br />
<span style="font-family: "arial"; font-size: small;">Prior Trend:</span><strong><span style="font-family: "arial"; font-size: small;">Bullish</span></strong><br />
<span style="font-family: "arial"; font-size: small;">Reliability:</span><strong><span style="font-family: "arial"; font-size: small;">Medium</span></strong><br />
<span style="font-family: "arial"; font-size: small;">Confirmation:</span><strong><span style="font-family: "arial"; font-size: small;">Required</span></strong><br />
<span style="font-family: "arial"; font-size: small;">No. of Sticks:</span><strong><span style="font-family: "arial"; font-size: small;">1</span></strong><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><strong><br /></strong></span>
<span style="font-family: "arial" , "helvetica" , sans-serif;"><strong><br /></strong></span>
<span style="font-family: "arial" , "helvetica" , sans-serif;"><strong><br /></strong></span>

<span style="font-family: "arial" , "helvetica" , sans-serif;"><strong>Characteristics:</strong></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">
1. Overall, market is on an uptrend;<br />
2. There is then a Doji that gaps in the direction of the uptrend;<br />
3. The body of the Doji is either a horizontal line or it is significantly small; and<br />
4. The upper and lower shadows of the Doji are long and are almost of equal length.</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><strong><br /></strong></span>

<span style="font-family: "arial" , "helvetica" , sans-serif;">
</span><span style="font-family: "arial" , "helvetica" , sans-serif;"><strong>Brief Explanation:</strong><br />
The BLLDP is a Doji portrayed by very long shadows. This shows the 
indecision of the buyers and sellers. It is an important reversal 
signal. The Long Legged Doji tells us that the prices trade well above 
and below the opening price. However, they close virtually at the 
opening price level. The end result is a very little change from the 
initial open despite the excitement and volatility during the day. The 
market has lost its sense of direction.</span><br />
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</span><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Notes:</b><br />
1. The Long Legged Doji is a single candlestick pattern<br />
2. On Day 2, a confirmation in the form of a move opposite to Day 1’s trade is suggested.</span><br />
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<span style="color: red;"><span style="font-size: large;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-list: Ignore;">3.<span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;">  </span></span>Bearish Engulfing</span></b></span></span><br />
<span style="color: red;"><span style="font-size: large;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></b></span></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjtgUwaXcREHeZ8y4Brn1pvmPusyqBZkNlkt_uo-LeTWFqpMQ-VG19Bui1LQCLBr9D1rqO3zul_7-kdP7cDt6FGVIJOOlr0WwGWfD5Zd2M9mrNwS_DsZU31qFJtREtS3qupwd-u9UWUuW4/s1600/bearishengulfing.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="167" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjtgUwaXcREHeZ8y4Brn1pvmPusyqBZkNlkt_uo-LeTWFqpMQ-VG19Bui1LQCLBr9D1rqO3zul_7-kdP7cDt6FGVIJOOlr0WwGWfD5Zd2M9mrNwS_DsZU31qFJtREtS3qupwd-u9UWUuW4/s320/bearishengulfing.jpg" width="165" /></a><b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span class="bodybldblue">Pattern:</span> reversal</span> </b><br />
<b></b><span style="font-family: "arial" , "helvetica" , sans-serif;"><b><span class="bodybldblue">Reliability:</span> moderate </b></span>
 <span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span> 
  
 <span style="font-family: "arial" , "helvetica" , sans-serif;"><b><span class="bodybldblue"><br /></span></b></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><b><span class="bodybldblue">Identification</span></b><br />
 A white day is then completely “engulfed” by a large black day which gaps above the white day's high and closes below its low.</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><b><span class="bodybldblue"><br /></span></b></span>
<span style="font-family: "arial" , "helvetica" , sans-serif;"></span><span style="font-family: "arial" , "helvetica" , sans-serif;"><b><span class="bodybldblue">The Psychology</span></b><br />
  In an uptrend or within a bounce of a downtrend, the gap up may be the
 blow out that causes the shorts to throw in the towel and cover. 
Meanwhile the smart money is selling and getting short and the selling 
activity is so intense, the stock closes below the previous day's low. 
The bullish Engulfing pattern is very common…literally dozens occur 
every day and many are just incidental. Watch volume for confirmation. </span>
  <span style="font-family: "arial" , "helvetica" , sans-serif;"><br />
  The bearish Engulfing is similar to the bearish Dark Cloud Cover and could be the beginning of the Three Outside Down. </span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">NKE formed a bearish Engulfing pattern at an area of a previous 
resistance point. The stock then broke support to confirm the reversal. 
You can't expect all trades to work this well; but you can enter and 
keep a reasonable stop in place while letting the stock run its course.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">DRD formed a bearish Engulfing pattern and broke support on the same day…a nice one-two punch.</span></div>
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<span style="color: red;"><b style="text-indent: -24px;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-list: Ignore;">4.<span style="font-size: 7pt; font-stretch: normal; font-weight: normal; line-height: normal;">  </span></span>Bearish Gravestone Doji<span style="mso-list: Ignore;"> </span></span></b><b style="background-color: transparent; font-family: arial, helvetica, sans-serif; text-indent: -0.25in;"><span style="font-size: large;"> </span></b></span></h2>
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<strong><span style="color: chocolate; font-family: "arial narrow"; font-size: medium;">BEARISH GRAVESTONE DOJI</span></strong></div>
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<tr valign="top"><td height="40" style="font-family: Verdana, Arial, Helvetica; font-size: 10pt;" width="100"><span style="font-family: "arial"; font-size: small;">Type:</span></td><td style="font-family: Verdana, Arial, Helvetica; font-size: 10pt;" width="174"><span style="font-family: "arial"; font-size: small;"><strong>Reversal</strong></span></td></tr>
<tr valign="top"><td height="34" style="font-family: Verdana, Arial, Helvetica; font-size: 10pt;"><span style="font-family: "arial"; font-size: small;">Relevance:</span></td><td style="font-family: Verdana, Arial, Helvetica; font-size: 10pt;"><span style="font-family: "arial"; font-size: small;"><strong>Bearish</strong></span></td></tr>
<tr valign="top"><td height="34" style="font-family: Verdana, Arial, Helvetica; font-size: 10pt;"><span style="font-family: "arial"; font-size: small;">Prior Trend:</span></td><td style="font-family: Verdana, Arial, Helvetica; font-size: 10pt;"><strong><span style="font-family: "arial"; font-size: small;">Bullish</span></strong></td></tr>
<tr valign="top"><td height="34" style="font-family: Verdana, Arial, Helvetica; font-size: 10pt;"><span style="font-family: "arial"; font-size: small;">Reliability:</span></td><td style="font-family: Verdana, Arial, Helvetica; font-size: 10pt;"><strong><span style="font-family: "arial"; font-size: small;">Medium</span></strong></td></tr>
<tr valign="top"><td height="34" style="font-family: Verdana, Arial, Helvetica; font-size: 10pt;"><span style="font-family: "arial"; font-size: small;">Confirmation:</span></td><td style="font-family: Verdana, Arial, Helvetica; font-size: 10pt;"><strong><span style="font-family: "arial"; font-size: small;">Suggested</span></strong></td></tr>
<tr valign="top"><td height="34" style="font-family: Verdana, Arial, Helvetica; font-size: 10pt;"><span style="font-family: "arial"; font-size: small;">No. of Sticks:</span></td><td style="font-family: Verdana, Arial, Helvetica; font-size: 10pt;"><strong><span style="font-family: "arial"; font-size: small;">2</span></strong></td></tr>
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<span class="normalloose" data-find="_1" style="font-size: 10pt; line-height: 20px;"><strong><br /><span style="font-family: "arial" , "helvetica" , sans-serif;">Definition:</span></strong></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Gravestone Doji is a pattern in which the opening and closing prices are at the low of the day. The Bearish Gravestone Doji Pattern is a top reversal pattern. It appears during an uptrend representing a possible reversal of trend just like its cousin Bearish Shooting Star Pattern.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<strong><span style="font-family: "arial" , "helvetica" , sans-serif;">Recognition Criteria:</span></strong></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">1. Market is characterized by uptrend.<br />2. We see a white candlestick at the higher end of the trading range in the first day.<br />3. Prices open with a gap and we see a Doji with no lower (or almost no) shadow on the second day.<br />4. Upper shadow of the doji is usually long.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<span class="normalloose" data-find="_1" style="font-size: 10pt; line-height: 20px;"><strong><span style="font-family: "arial" , "helvetica" , sans-serif;">Explanation:</span></strong></span></div>
<div style="text-decoration: none;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Gravestone Doji after a rally has bearish implications for the following reason. The market opens on the low of the day. Then prices start to rally (preferably to a new high). The rally cannot be sustained during the day and prices plummet to the day’s lows meaning trouble for longs. The Gravestone Doji represents the graves of those bulls that have died defending their territory.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<strong><span style="font-family: "arial" , "helvetica" , sans-serif;">Important Factors:</span></strong></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">The Bearish Gravestone Doji Pattern has more bearish implications than a Bearish Shooting Star Pattern.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">The longer the upper shadow and the higher the price level, the more bearish the implications of the Bearish Gravestone Doji Pattern will be.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span class="normalloose" data-find="_1" style="font-size: 10pt; line-height: 20px;"></span></span><br /></div>
<div style="text-decoration: none;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">A confirmation is required on the following day to be more certain about the bearish implications of the Bearish Gravestone Doji Pattern. Confirmation may be in the form of the next day opening below the Gravestone Doji. The larger the gap the stronger the confirmation will be. A black candlestick with lower prices can also be another form of confirmation.</span></div>
<h2 style="text-decoration: none;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgN0xhyphenhyphenJpBOC7S_D3cpN56ejp_1PlTGA1kIsDUZv5yNV5Hdq1GBSX7PiZL8eJB5LWIBDe_cU958UPu0v2yGsKPdrQNeI6-tFllnrRahsXf2pPib6crVe-LD3tIMnOVfF7U65Oi77LygZz8/s1600/47FIG.gif" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="250" data-original-width="250" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgN0xhyphenhyphenJpBOC7S_D3cpN56ejp_1PlTGA1kIsDUZv5yNV5Hdq1GBSX7PiZL8eJB5LWIBDe_cU958UPu0v2yGsKPdrQNeI6-tFllnrRahsXf2pPib6crVe-LD3tIMnOVfF7U65Oi77LygZz8/s200/47FIG.gif" width="200" /></a><b style="text-indent: -24px;"><span style="color: red; font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-list: Ignore;">5.<span style="font-size: 7pt; font-stretch: normal; font-weight: normal; line-height: normal;"> </span></span>Bearish Doji Star</span></b></h2>
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<span style="font-family: "arial"; font-size: small;">Type:</span><span style="font-family: "arial"; font-size: small;"><strong>Reversal</strong></span></div>
<div style="text-decoration: none;">
<span style="font-family: "arial"; font-size: small;">Relevance:</span><span style="font-family: "arial"; font-size: small;"><strong>Bearish</strong></span></div>
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<span style="font-family: "arial"; font-size: small;">Prior Trend:</span><strong><span style="font-family: "arial"; font-size: small;">Bullish</span></strong></div>
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<span style="font-family: "arial"; font-size: small;">Reliability:</span><strong><span style="font-family: "arial"; font-size: small;">Medium</span></strong></div>
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<span style="font-family: "arial"; font-size: small;">Confirmation:</span><strong><span style="font-family: "arial"; font-size: small;">Suggested</span></strong></div>
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<span style="font-family: "arial"; font-size: small;">No. of Sticks:</span><strong><span style="font-family: "arial"; font-size: small;">2</span></strong></div>
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<strong><span style="font-family: "arial"; font-size: small;"><br /></span></strong></div>
<div style="text-decoration: none;">
<strong style="text-align: start;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Definition:</span></strong><br />
<div style="text-align: start;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">A doji following a white candlestick with an upside gap during an uptrend, is the Bearish Doji Star Pattern.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></div>
<div style="text-align: start;">
<strong><span style="font-family: "arial" , "helvetica" , sans-serif;">Recognition Criteria:</span></strong></div>
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="text-align: start;">1. Market is characterized by uptrend.</span><br style="text-align: start;" /><span style="text-align: start;">2. We see a long white candlestick in the first day.</span><br style="text-align: start;" /><span style="text-align: start;">3. Then we see a Doji that gaps in the direction of the previous trend on the second day.</span><br style="text-align: start;" /><span style="text-align: start;">4. The shadows of the Doji are not long.</span><br style="text-align: start;" /><span style="text-align: start;"> </span></span><br />
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<strong><span style="font-family: "arial" , "helvetica" , sans-serif;">Explanation:</span></strong></div>
<div style="text-align: start;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Bulls control the market in a strong uptrend. The appearance of a Bearish Doji Star Pattern in such an uptrend shows that buyers are now losing the control and market is moving to a deadlock between buyers and sellers. This deadlock or balance between buyers and sellers may result because of a diminution in the buying force or an increase in the selling force. Whatever the reason is, the star tells us that the strength of uptrend is now dissipating and the market is increasingly vulnerable to a setback.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></div>
<div style="text-align: start;">
<strong><span style="font-family: "arial" , "helvetica" , sans-serif;">Important Factors:</span></strong></div>
<div style="text-align: start;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">A confirmation on the third day is required to convincingly show that the uptrend has reversed. This confirmation may be in the form of a black candlestick, a large gap down or a lower close on the next trading day.</span></div>
</div>
<h2 style="text-decoration: none;">
<b style="text-indent: -24px;"><span style="color: red; font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-list: Ignore;">6.<span style="font-size: 7pt; font-stretch: normal; font-weight: normal; line-height: normal;"> </span></span>Bearish Harami Cross</span></b></h2>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjsDLXZGEU_4LlLja1F8vgiB2-B_-amsFBOJmTYmWSs6YhALBJbO-DXhh2ZYOb3vbJLMnM5HXCTnbdKCbAQo2-Y6PMqOkjLjQZ-paUc6FiZgiqMhKDzRvDakrSdrJ38AkyvIMcGW2dkgO4/s1600/43FIG.gif" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="251" data-original-width="250" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjsDLXZGEU_4LlLja1F8vgiB2-B_-amsFBOJmTYmWSs6YhALBJbO-DXhh2ZYOb3vbJLMnM5HXCTnbdKCbAQo2-Y6PMqOkjLjQZ-paUc6FiZgiqMhKDzRvDakrSdrJ38AkyvIMcGW2dkgO4/s200/43FIG.gif" width="199" /></a></div>
<table border="0" cellpadding="0" cellspacing="0" id="table2" style="font-family: verdana, arial, helvetica; height: 217px; text-decoration: none; width: 281px;"><tbody>
<tr valign="top"><td height="40" style="font-size: 10pt;" width="100"><span style="font-family: "arial"; font-size: small;">Type:</span></td><td style="font-size: 10pt;" width="174"><span style="font-family: "arial"; font-size: small;"><strong>Reversal</strong></span></td></tr>
<tr valign="top"><td height="34" style="font-size: 10pt;"><span style="font-family: "arial"; font-size: small;">Relevance:</span></td><td style="font-size: 10pt;"><span style="font-family: "arial"; font-size: small;"><strong>Bearish</strong></span></td></tr>
<tr valign="top"><td height="34" style="font-size: 10pt;"><span style="font-family: "arial"; font-size: small;">Prior Trend:</span></td><td style="font-size: 10pt;"><strong><span style="font-family: "arial"; font-size: small;">Bullish</span></strong></td></tr>
<tr valign="top"><td height="34" style="font-size: 10pt;"><span style="font-family: "arial"; font-size: small;">Reliability:</span></td><td style="font-size: 10pt;"><strong><span style="font-family: "arial"; font-size: small;">Medium</span></strong></td></tr>
<tr valign="top"><td height="34" style="font-size: 10pt;"><span style="font-family: "arial"; font-size: small;">Confirmation:</span></td><td style="font-size: 10pt;"><strong><span style="font-family: "arial"; font-size: small;">Recommended</span></strong></td></tr>
<tr valign="top"><td height="34" style="font-size: 10pt;"><span style="font-family: "arial"; font-size: small;">No. of Sticks:</span></td><td style="font-size: 10pt;"><strong><span style="font-family: "arial"; font-size: small;">2</span></strong></td></tr>
</tbody></table>
<div style="text-decoration: none;">
<strong style="text-align: start;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Definition:</span></strong></div>
<div style="text-decoration: none;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Bearish Harami Cross Pattern is a doji preceded by a long white real body. The Bearish Harami Cross Pattern is a major reversal pattern and is more significant than a regular Bearish Harami Pattern.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></div>
<div style="text-decoration: none;">
<strong><span style="font-family: "arial" , "helvetica" , sans-serif;">Recognition Criteria:</span></strong></div>
<div style="text-decoration: none;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="text-align: start;">1. Market is characterized by uptrend.</span><br style="text-align: start;" /><span style="text-align: start;">2. We see a long white candlestick in the first day.</span><br style="text-align: start;" /><span style="text-align: start;">3. Then we see a doji completely engulfed by the real body of the first day on the second day. The shadows (high/low) of this Doji do not have to be contained within the first, though it's preferable if they are.</span><br style="text-align: start;" /><span style="text-align: start;"> </span></span></div>
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<strong><span style="font-family: "arial" , "helvetica" , sans-serif;">Explanation:</span></strong></div>
<div style="text-decoration: none;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">The Bearish Harami Cross Pattern is a sign of disparity about the market’s health. Market is bullish and strong buying continues as evidenced by the long, white real body but then we see the doji. This shows that the market may not continue in uptrend.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></div>
<div style="text-decoration: none;">
<strong><span style="font-family: "arial" , "helvetica" , sans-serif;">Important Factors:</span></strong></div>
<div style="text-decoration: none;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">While the Bearish Harami Pattern is not a major reversal pattern, the Bearish Harami Cross Pattern is a major downside reversal pattern. If a harami cross appears after a long white candlestick, longs should take notice of it since Harami Crosses call tops very effectively.</span></div>
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<div style="text-decoration: none;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">A confirmation on the third day is required to be sure that the uptrend has reversed. This confirmation may be in the form of a black candlestick, a large gap down or a lower close on the third day.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></div>
<h2>
<span style="color: red; font-family: "arial" , "helvetica" , sans-serif;"><b>7. BEARISH MEETING LINES</b></span></h2>
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhV3N9ZBdDSxCGbl13Bgyp57EdZfH8RkWjykAKK4eKI92HjJyNWzi74Y6mmteOPIMWM5NQm_LkjVPDOai8HSgTa3rursvLH1A93G7lqTSnOhY33HFw688LlhRM3UMjBGKC8wGqzJYg4QzU/s1600/45FIG.gif" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="251" data-original-width="250" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhV3N9ZBdDSxCGbl13Bgyp57EdZfH8RkWjykAKK4eKI92HjJyNWzi74Y6mmteOPIMWM5NQm_LkjVPDOai8HSgTa3rursvLH1A93G7lqTSnOhY33HFw688LlhRM3UMjBGKC8wGqzJYg4QzU/s200/45FIG.gif" width="199" /></a><span style="font-family: "arial" , "helvetica" , sans-serif;">Type:<span class="Apple-tab-span" style="white-space: pre;"> </span>Reversal</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">Relevance:<span class="Apple-tab-span" style="white-space: pre;"> </span>Bearish</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">Prior Trend:<span class="Apple-tab-span" style="white-space: pre;"> </span>Bullish</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">Reliability:<span class="Apple-tab-span" style="white-space: pre;"> </span>Medium</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">Confirmation:<span class="Apple-tab-span" style="white-space: pre;"> </span>Suggested</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">No. of Sticks:<span class="Apple-tab-span" style="white-space: pre;"> </span>2</span><br />
<table border="0" cellpadding="0" cellspacing="0" data-find="_5" id="table1" style="height: 906px; text-decoration: none; width: 598px;"><tbody data-find="_4">
<tr data-find="_3" valign="top"><td colspan="3" data-find="_2"><span class="normalloose" data-find="_1" style="line-height: 20px;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><strong>Definition:</strong>Market may gap up sharply as it opens but it closes unchanged from the prior session’s close during an uptrend. Such a pattern is called Bearish Meeting Lines Pattern, which is a pattern that reflects a balance between the bulls and the bears.<br />
<strong>Recognition Criteria:</strong><br />
1. Market is characterized by uptrend.<br />2. We see a long white candlestick in the first day.<br />3. Then we see a long black candlestick, which has a body that is also higher than the previous trend on the second day.<br />4. The close of both days is same or almost same.<br />5. Both of the candlesticks are long but second day candlestick may be shorter than the first.<br /><br /><strong>Explanation:</strong><br />
The Bearish Meeting Lines Pattern is a top reversal pattern suggesting a stall in uptrend. The first candlestick, a long white one, shows that the bullish momentum is going on. The next day opens higher with a gap but then the bears pull prices down to the prior day’s close. So the initial optimism on the second day’s opening now turns into concern of the longs.<br />
<strong>Important Factors:</strong><br />
The Bearish Meeting Lines Pattern is similar to the Bearish Dark Cloud Cover Pattern. The Dark Cloud Cover has the same two-candlestick pattern. The main difference between the two is the fact that the bearish counterattack line does not usually move into the prior session’s white real body. It just gets back to prior session’s close. The Bearish Dark Cloud Cover Pattern’s second line pushes well into the white real body. So the Dark Cloud Cover Pattern is a more important top reversal signal than the Bearish Meeting Lines Pattern.<br />
A confirmation on third day is required to be sure that the uptrend has reversed. This confirmation may be in the form a black candlestick, a large gap down or a lower close on the third day.<br />
</span></span><br />
<h2>
<span class="normalloose" data-find="_1" style="line-height: 20px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">
<span style="color: red; font-size: large;">8. BEARISH ADVANCE BLOCK</span></span></span></h2>
<span class="normalloose" data-find="_1" style="line-height: 20px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">
<span style="font-size: 13.3333px;"><br /></span>
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEitiMgisb2VPeew4oAH2RrjhMnqZdSsEFzsUyu1kHfQcMT4-7lAvo_rKqVpJ6esmPVRq4qtH7QiJt6W-MA8gpt2PhVnuQ7Zw67cQoCOEbRQ2eugiqzq9zt1ziAxR4Fros6eqM_ZpU-iuCE/s1600/AB.gif" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="250" data-original-width="250" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEitiMgisb2VPeew4oAH2RrjhMnqZdSsEFzsUyu1kHfQcMT4-7lAvo_rKqVpJ6esmPVRq4qtH7QiJt6W-MA8gpt2PhVnuQ7Zw67cQoCOEbRQ2eugiqzq9zt1ziAxR4Fros6eqM_ZpU-iuCE/s200/AB.gif" width="200" /></a>Type:<span class="Apple-tab-span" style="white-space: pre;"> </span>Reversal<br />
Relevance:<span class="Apple-tab-span" style="white-space: pre;"> </span>Bearish<br />
Prior Trend:<span class="Apple-tab-span" style="white-space: pre;"> </span>Bullish<br />
Reliability:<span class="Apple-tab-span" style="white-space: pre;"> </span>Medium<br />
Confirmation:<span class="Apple-tab-span" style="white-space: pre;"> </span>Suggested<br />
No. of Sticks:<span class="Apple-tab-span" style="white-space: pre;"> </span>3<br />
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<br />
Definition:<br />
It is a pattern characterized by three long white candlesticks with consecutively higher closes during an uptrend. The Bearish Advance Block Pattern is similar to the Bullish Three White Soldiers Pattern. The difference is the fact that each successive day is weaker than the one preceding it. This may suggest that the rally is losing strength and a reversal is possible.<br />
<br />
Recognition Criteria:<br />
<br />
1. Market is characterized by uptrend.<br />
2. We see three adjacent white candlesticks with consecutively higher closes.<br />
3. Each day opens within the previous day's body.<br />
4. Each day’s body is significantly smaller than the body of the previous day.<br />
<br />
Explanation:<br />
<br />
If the second and the third candlesticks (particularly the third) show signs of weakening, this means that the rally is losing steam and longs must consider protecting their positions. Longs need especially to be careful about the Bearish Advance Block Pattern during a mature uptrend. Signs of weakening are the progressively smaller white real bodies or the relatively long upper shadows on the latter two white candlesticks.<br />
<br />
Important Factors:<br />
<br />
A definite deterioration in the upward strength is evidenced by long upper shadows on the second and third days.<br />
<br />
The Bearish Advance Block Pattern is not normally a top reversal pattern, but it has the potential to precede a meaningful price decline. This pattern is more important at higher price levels. It suggests to liquidate long positions but it is yet early for short positions.<br />
<br />
A confirmation of the reversal on the fourth day would provide the needed proof that the uptrend has reversed. A confirmation of the trend reversal by a black candlestick, a large gap down or by a lower close on the next trading day is suggested.<br />
<span style="font-size: 13.3333px;"><br /></span>
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<h2>
<span class="normalloose" data-find="_1" style="line-height: 20px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">
<span style="color: red; font-size: large;"><b>10. BEARISH DELIBERATION</b></span></span></span></h2>
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<span style="font-size: 13.3333px;"><br /></span>
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgXNMBu55lmv0Y9-S4VO0jdjLPbBvppthtauVQK_kyyL_HfxgnaXYV55aMDLanPw1Wvrq9ZL6tZrPMjSNRlcc0m-xhaPJ9AtaVYJDwioU8wW96BXCT_21oqnSy8SrlL1sZe9WCeOTbc34I/s1600/db.gif" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="250" data-original-width="250" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgXNMBu55lmv0Y9-S4VO0jdjLPbBvppthtauVQK_kyyL_HfxgnaXYV55aMDLanPw1Wvrq9ZL6tZrPMjSNRlcc0m-xhaPJ9AtaVYJDwioU8wW96BXCT_21oqnSy8SrlL1sZe9WCeOTbc34I/s200/db.gif" width="200" /></a>Type:<span class="Apple-tab-span" style="white-space: pre;"> </span>Reversal<br />
Relevance:<span class="Apple-tab-span" style="white-space: pre;"> </span>Bearish<br />
Prior Trend:<span class="Apple-tab-span" style="white-space: pre;"> </span>Bullish<br />
Reliability:<span class="Apple-tab-span" style="white-space: pre;"> </span>Medium<br />
Confirmation:<span class="Apple-tab-span" style="white-space: pre;"> </span>Suggested<br />
No. of Sticks:<span class="Apple-tab-span" style="white-space: pre;"> </span>3<br />
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<br />
Definition:<br />
The Bearish Deliberation Pattern is a derivative of the Bearish Three White Soldiers Pattern. This pattern also shows a weakness similar to the Bearish Advance Block Pattern since it becomes weaker in a short period of time. However here the weakness occurs all at once on the third day. The small third body of the pattern shows that the rally is losing strength and a reversal is possible.<br />
<br />
Recognition Criteria:<br />
<br />
1. Market is characterized by uptrend.<br />
2. We see long white bodies in the first and second days.<br />
3. The second day has a higher close than the first day.<br />
4. Then the third day opens near the second day's close.<br />
5. The third day is typically a short white candlestick, a spinning top or a star that gaps above the second day.<br />
<br />
Explanation:<br />
The Bearish Deliberation Pattern appears after a sustained upward move and is suggestive of the fact that the rally is losing strength and a reversal is possible. The formation is a proof that the bulls’ strength is at least temporarily exhausted.<br />
<br />
Important Factors:<br />
<br />
The last small white candlestick may show a gap away from the long white body, thus becoming a star, or it can be riding on the shoulder of the long white real body.<br />
<br />
The Bearish Deliberation Pattern is not normally a top reversal pattern but it has potential to precede a meaningful price decline. This pattern is more important at higher price levels. It must be used to liquidate long positions but it is yet too early for short positions.<br />
<br />
<br />
A confirmation on fourth day is required to confirm that the uptrend has reversed. This may be in the form of a black candlestick, a large gap down or a lower close on the fourth day.</span></span></td></tr>
</tbody></table>
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><b>11. BEARISH TRI STAR</b></span></h2>
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg9J8BKN1rweb5KL1bH1EI_FTgLt5MWNQCcwh_1tJU5qrVvOZojDL_G9LZHWj-8Mbqd8XIKyHeGISc_8_veEx3yKS6iK4vzPni39gGISj-NpqN0BDNrrZXKJFe_t0iFuZu7vflJ6bJ0Ubo/s1600/tt.gif" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="250" data-original-width="250" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg9J8BKN1rweb5KL1bH1EI_FTgLt5MWNQCcwh_1tJU5qrVvOZojDL_G9LZHWj-8Mbqd8XIKyHeGISc_8_veEx3yKS6iK4vzPni39gGISj-NpqN0BDNrrZXKJFe_t0iFuZu7vflJ6bJ0Ubo/s1600/tt.gif" /></a><span style="font-family: "arial" , "helvetica" , sans-serif;">Type:<span class="Apple-tab-span" style="white-space: pre;"> </span>Reversal</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">Relevance:<span class="Apple-tab-span" style="white-space: pre;"> </span>Bearish</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">Prior Trend:<span class="Apple-tab-span" style="white-space: pre;"> </span>Bullish</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">Reliability:<span class="Apple-tab-span" style="white-space: pre;"> </span>Medium</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">Confirmation:<span class="Apple-tab-span" style="white-space: pre;"> </span>Suggested</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">No. of Sticks:<span class="Apple-tab-span" style="white-space: pre;"> </span>3</span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Definition:</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">The Bearish Tri Star Pattern is a very rare but significant top reversal pattern. It is formed by three Dojis. The middle Doji is a Doji Star.</span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Recognition Criteria:</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">1. Market is characterized by uptrend.</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">2. We see three Dojis on three consecutive days.</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">3. The second day Doji has a gap above the first and third.</span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Explanation:</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">The Bearish Tri Star Pattern appears in a market characterized by uptrend for a long time. When the trend starts to show weakness, we see smaller real bodies. The first Doji is already a matter of considerable concern. The second Doji shows that market now lost its direction. Finally, the third Doji announces the end of uptrend since this now shows utmost indecision leading to reversal of the positions.</span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Important Factors:</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">A confirmation on the fourth day is required to show that the uptrend has reversed. This may be in the form of a black candlestick, a large gap down or a lower close on the fourth day.</span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif;">12. BEARISH TWO CROWS</span></h2>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg8nsxvSCquGNoaD5jPDBGAD8ha6Uzg481e9IKG93JrnDpWtRRvQJR5a6Mw06ow0c2nth_w0YUj0P9z8WsRlMEl9TPx8ArE_DEjfrPcoCl_hUEvkVkE7wPYmJbVs7OLkpSMRABoERvwLiU/s1600/tc.gif" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="250" data-original-width="250" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg8nsxvSCquGNoaD5jPDBGAD8ha6Uzg481e9IKG93JrnDpWtRRvQJR5a6Mw06ow0c2nth_w0YUj0P9z8WsRlMEl9TPx8ArE_DEjfrPcoCl_hUEvkVkE7wPYmJbVs7OLkpSMRABoERvwLiU/s200/tc.gif" width="200" /></a><span style="font-family: "arial" , "helvetica" , sans-serif;">Type:<span class="Apple-tab-span" style="white-space: pre;"> </span>Reversal</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Relevance:<span class="Apple-tab-span" style="white-space: pre;"> </span>Bearish</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Prior Trend:<span class="Apple-tab-span" style="white-space: pre;"> </span>Bullish</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Reliability:<span class="Apple-tab-span" style="white-space: pre;"> </span>Medium</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Confirmation:<span class="Apple-tab-span" style="white-space: pre;"> </span>Suggested</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">No. of Sticks:<span class="Apple-tab-span" style="white-space: pre;"> </span>3</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Definition:</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">During an uptrend we see the market closing lower after an opening gap. Then we see a black day that fills the gap creating the Bearish Two Crows Pattern. It suggests the erosion of the uptrend, and warns about a possible trend reversal.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Recognition Criteria:</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">1. Market is characterized by uptrend.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">2. We see a long white candlestick in the first day.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">3. Then we see a black candlestick on the second day characterized by a gap up.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">4. Finally we see a black candlestick whose opening price is inside the body of the second day and which closes inside the body of the first day.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Explanation:</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">In the Two Crows bear pattern, the market is already in an extended uptrend. We see a gap in the opening of the second day. This higher opening is followed by a lower close in this second day warning that there is some weakness in the rally. The third day also opens at a higher price, but not above the open of the previous day, and then prices go down with a close well within the body of the first day. This third day action fills the gap of the second day. It shows that the bullishness started to erode quickly.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Important Factors:</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">A confirmation on the fourth day is required to show that the uptrend has reversed. This confirmation may be in the form of a black candlestick, a large gap down or a lower close on the fourth day.</span></div>
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13. BEARISH BREAKAWAY</h2>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiGu4qAHW3hCfbASYVFXVEVDdZ3j0oQDzCmesUmg6ftT5EdiOorGxMsRRHZ-B_o4F3I90t826sLRnR94jp51tKA2xKb-wNsJcArtWl-UqFO1pjffeM52JopjOQVZjIH3XCZZK4mLH76KDM/s1600/bw.gif" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="250" data-original-width="250" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiGu4qAHW3hCfbASYVFXVEVDdZ3j0oQDzCmesUmg6ftT5EdiOorGxMsRRHZ-B_o4F3I90t826sLRnR94jp51tKA2xKb-wNsJcArtWl-UqFO1pjffeM52JopjOQVZjIH3XCZZK4mLH76KDM/s200/bw.gif" width="200" /></a><span style="font-family: "arial" , "helvetica" , sans-serif;">Type:<span class="Apple-tab-span" style="white-space: pre;"> </span>Reversal</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Relevance:<span class="Apple-tab-span" style="white-space: pre;"> </span>Bearish</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Prior Trend:<span class="Apple-tab-span" style="white-space: pre;"> </span>Bullish</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Reliability:<span class="Apple-tab-span" style="white-space: pre;"> </span>Medium</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Confirmation:<span class="Apple-tab-span" style="white-space: pre;"> </span>Recommended</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">No. of Sticks:<span class="Apple-tab-span" style="white-space: pre;"> </span>5</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Definition:</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">We see this pattern during an uptrend marked with a bullish surge that eventually weakens. This weakening is illustrated by a long black candlestick that is unable to close the gap into the body of the first day. These events warn us about a short-term reversal.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Recognition Criteria:</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">1. Market is characterized by uptrend.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">2. We see a long white candlestick in the first day.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">3. Then we see a white candlestick with a gap above the first day on the second day.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">4. However the third and fourth days continue in the direction of the second day with higher consecutive closes.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">5. Finally we see a long black candlestick on the fifth day with a closing price inside the gap caused by the first and second days.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Explanation:</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">The Bearish Breakaway Pattern is constituted by a gap in the direction of the uptrend followed by three consecutively higher price days. This shows that the trend has suddenly accelerated with a big gap but then it started to fizzle, however it still manages to move in the same direction. There is evidently a slow deterioration of the trend even though the uptrend continues. Finally, we see a burst in the opposite direction completely recovering the previous three days' price action. A possible reversal is also implied by the fact the gap has not been filled. We are now ready for a short-term reversal.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Important Factors:</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">A confirmation on the sixth day is recommended in the form of a black candlestick, a large gap down or a lower close to be sure that there is indeed a reversal.</span></div>
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Bearish Medium Reliability Candlestick Patterns 46. Bearish Medium Reliability Candlestick Patterns

Bearish Medium Reliability Candlestick Patterns 1. Bearish Dragonfly Doji 2. Bearish Long legged Doji 3. Bearish ...