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piercing indicates trend reversal and is good for weekly traders the criteria’s are as follows
bullish – green body should cover the previous days low, the bull body should cover atleast 50% of previous day body, the upper tail should be shorter, volumes may increase, buy when the price crosses the previous day high, stop loss should be previous days low, profit is the amount of risk taken.
bearish – red body should cover the previous days body by 50% of previous days body, the lower tail should be lower and volumes may decrease. sell when price crosses previous days low.
Piercing pattern is only a variation of bullish engulfing pattern
1 the stock is in a stream of DOWN trend
2 bear candle appears asper the existing down trend on the first day
3 the next day is a BULL candle which opens BELOW the bottom of the first day bear candle but CLOSES above the half of the body of the first day bear candle
4 volume must be there on the piercing day ie on the bull candle day
5 IF( on the third day) the price moves UP above the top of the two (bear and bull)candle then BULLISH trend is confirmed
BUY WHEN CONDITION NO 5 given above is satisfied(STOP LOSS at BOTTOM of the piercing(bull)candlePiercing pattern is a candle stick pattern which determines the trend reversal. The body should cover thhe previous day’s low. today’s body should cover at least 50% mark of previous body. The upper tail should not be very big. BUY when it’s bullish reversal and SELL when it’s bearish reversal.
Piercing pattern is when the whole green candlestick peirces(is not able to cover the whole of the previos red, but is able to cover about half). We’re expected to buy at the highest price at the previous two days, And sold at the lowest previous two days(stoploss). Target is set as the same of the stoploss
piercing pattern should cover at least 50% of previous red body then only it is determine as piercing pattern
conditions:
1.there should be a bearish trend before piercing pattern
2.it should cover minimum of 50% of previous red body
3. compare last two body in that the highest tail after breaking that level one can buy the stock and selling is same compare last two lower level among that is lower level and we can keep that as a stop loss.
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