Candlestick Analysis

Candlestick Analysis - Term Definition Evening Star-The...

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Term: Definition: Evening Star -The evening star is the bear version of the same formation. It consists of a bear inverted hammer (an upward day and upward gap) followed by a downward day moving lower. -Valuable reversal indicator. Term: Definition: Bull Marubozu -The long white candle is clearly bullish and probably signals a coming uptrend in price. -As long as the price in subsequent days remains above the lowest point of the lower shadow, it represents a support level. -When there is no shadow on either end of this candle, it is the most bullish of all. Term: Definition: Bear Marubozu -The long black candle is clearly bearish and probably signals a coming downtrend in price. -As long as the price in subsequent days remains below the highest point of the upper shadow, it represents a resistance level. -When there is no shadow on either end of this candle, it is the most bearish of all.
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Term: Definition: Doji -Often appears at the point where the trend is about to turn in the opposite direction. Term: Definition: Dragonfly Doji -A type of doji with a lower shadow. -The longer the shadow, the greater the bullish indication. -The lower extension of the shadow forms a short-term support level that can be used to check coming trading sessions and to identify and time your entry. Term: Definition: Gravestone Doji -A type of doji with an upper shadow;. -The longer the shadow, the greater the bearish indication.
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Term: Definition: Long-Legged Doji -A doji sign with exceptionally large upper and lower shadows, indicating a coming reversal in the current trend. -If the horizontal line is found on the upper half of the shadow extension, it is a bullish sign. -If the vertical line is found on the lower half, it is a bearish sign. Term: Definition: Spinning Top -A candlestick with a relatively small real body and upper and lower shadows. The real body is approximately midway in the day's range, and both shadows are at least the same size as the real body. -When located at the top or bottom of a trend, it may signal reversal. -When this candle forms midrange, it can give out a false read.
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Term: Definition: Hanging Man -A pattern with a small real body, no upper shadow, and a longer-than-usual lower shadow. -It appears at the top of an uptrend and is a bearish day indicating an impending reversal, or it appears as confirmation during a downtrend. Hammer -A pattern with a small real body, no upper shadow, and a longer-than-usual lower shadow. -It appears at the bottom of a downtrend and is a bullish day indicating an impending reversal, or it appears as confirmation during an uptrend. Term: Definition: Bull Engulfing Pattern -A double-stick move in which the range of the setup period's stick is surpassed by the range of the signal period, and in which the setup stick's shadows are longer than those of the signal period.
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