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Candlestick
Interpretations: Bearish Patterns
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Long Black (Filled-in) Line: This is a
bearish line. It occurs when prices open near the high and close
significantly lower near the period's low. |
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Hanging Man: These lines are bearish if
they occur after a significant uptrend. If this pattern occurs
after a significant downtrend, it is called a Hammer. They are
identified by small real bodies (i.e. a small range between the
open and closing prices) and a long lower shadow (i.e. the low
was significantly lower than the open, high, and close). The
bodies can be empty or filled-in. |
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Dark Cloud Cover: This is a bearish
pattern. The pattern is more significant if the second line's
body is below the center of the previous line's body (as
illustrated). |
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Bearish Engulfing Lines: This pattern is
strongly bearish if it occurs after a significant up-trend (i.e.
it acts as a reversal pattern). It occurs when a small bullish
(empty) line is engulfed by a large bearish (filled-in) line. |
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Evening Star: This is a bearish pattern
signifying a potential top. The "star" indicates a possible
reversal and the bearish (filled-in) line confirms this. The
star can be empty or filled-in. |
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Doji Star: A star indicates a reversal
and a doji indicates indecision. Thus, this pattern usually
indicates a reversal following an indecisive period. You should
wait for a confirmation (e.g. as in the evening star
illustration) before trading a doji star. |
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Shooting Star: This pattern suggests a
minor reversal when it appears after a rally. The star's body
must appear near the low price and the line should have a long
upper shadow. |
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Long-Legged Doji: This line often
signifies a turning point. It occurs when the open and close are
the same, and the range between the high and low is relatively
large. |
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Dragon-Fly Doji: This line also signifies
a turning point. It occurs when the open and close are the same,
and the low is significantly lower than the open, high, and
closing prices. |
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Gravestone Doji: This line also signifies
a turning point. It occurs when the open, close, and low are the
same, and the high is significantly higher than the open, low,
and closing prices. |
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Star: Stars indicate reversals. A star is
a line with a small real body that occurs after a line with a
much larger real body, where the real bodies do not overlap. The
shadows may overlap. |
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