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Tagged: Piercing pattern
Piercing pattern can be identified by using candle sticks.
The candle body should cover the previous day low and at-least 50% mark of previous day top. The upper tail should not be very big.
When price goes below today’s lowest point, we should sell, when price goes the previous day’s highest point we should buy.
Piercing pattern is a variation of engulfing pattern
the stock may be in a stream of DOWN or up trend.
bear candle appears as per the existing down trend on the first day
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
volume must be high on the piercing day ie on the bull candle day
IF( on the next day) the price moves UP above the top of the two (bear and bull)candle then BULLISH trend is confirmed
BUY WHEN above CONDITION is satisfied (STOP LOSS at BOTTOM of the piercing(bull)candle and target at least same or more of the stoploss.
Piercing pattern is slightly similar to Engulfing but it indicates trend reversal which is good for weekly traders
The Green body should cover the previous day low
The green body should cover at least 50 % for previous day Red body
The upper tails should be small size
Above the previous day(Black) tail
Stop loss below the current tail
If the Body covers the Previous day’s Low.,
Today’s Body should Cover At Least 50% of Previous Body.,
BUY => When it’s Bullish reversal.,
&
SELL => When it’s Bearish reversal….!
Body should Cover Previous low at least by 50%. Upper Tail should not be very Big. Buy – When Bullish Reversal. sell – Bearish Reversal.
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