• Type: Reversal
• Reliability: Low
• In a downtrend, a long red candle occurs
• The Blue candle has an open price that is very close to the low of the day
• Little or no lower wick on the candle.
After a stretch of bearish candlesticks, a strong bullish candle forms. The bullish candle opens at the day's low, and closes significantly lower. The result is a long blue candlestick with a short lower wick or no wick at all. This decided turn in direction may signify a bullish trend to come. But many traders will look for additional confirmation in the form of bullish moves the following days. The formation occurs frequently and is often incorrect in predicting future trend. To a degree the significance of the formation is fairly obvious; an downtrend is broken by a strong day's move. Thus the larger the blue candle, the stronger the likelihood of reversal. Traders will typically wait for further confirmation.
• Reliability: Low
• In a downtrend, a long red candle occurs
• The Blue candle has an open price that is very close to the low of the day
• Little or no lower wick on the candle.
After a stretch of bearish candlesticks, a strong bullish candle forms. The bullish candle opens at the day's low, and closes significantly lower. The result is a long blue candlestick with a short lower wick or no wick at all. This decided turn in direction may signify a bullish trend to come. But many traders will look for additional confirmation in the form of bullish moves the following days. The formation occurs frequently and is often incorrect in predicting future trend. To a degree the significance of the formation is fairly obvious; an downtrend is broken by a strong day's move. Thus the larger the blue candle, the stronger the likelihood of reversal. Traders will typically wait for further confirmation.
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