Apr 2 2010
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Candlestick Patterns with this 82 page PDF FREE Candlestick Guide. Suppose you want to sell the stock because you believe that the price is close to peaking. The appearance of a candlestick pattern showing the trend is still in place and is expected to continue my help you exit at a still more profitable price. Thrusting Lines Candlestick Pattern is one such trend confirming pattern.
There are as usual two types of thrusting lines candlestick patterns-bullish as well as bearish. Bullish thrusting lines candlestick pattern is a long bullish candle on the first day. The second day or what you call the signal day, it is a bearish candle with a gap opening price higher than the high of the setup day. However, the close of the signal day should be above the midpoint of the setup day.
What this means is that on the first day, bulls had been in charge of the market. On the second day, bulls push a security to have a gap opening. This brings in some sellers but the bears are unable to push the price above the middle of the previous day. This means is that bulls are still around and are poised to take control of the market again.
This type of a candlestick pattern is a great help if you are thinking of riding the trend, this is a signal that you can get on board as the trend is expected to continue and price will continue to go up.
The second important candlestick trend confirming pattern is the bullish separating lines pattern. This pattern is formed when on the setup day, you find a long bearish candle meaning that the bears have been in total control throughout the days.
The second day candle is a bullish one with the open equal or almost equal to the open of the previous day. This is the distinguishing feature of this pattern. The bullish separating lines confirm an uptrend. The setup day is bearish. The bears decide that the price is right to start selling.
However, on the signal day, the bulls come into play and start buying. There is so much bullishness in the market that the opening price of the signal day is equal to the opening price of the set up day. From that point on the bulls dominate the market and the uptrend continues.
Now both these candlestick patterns are rare and do not appear frequently. But when they appear during an uptrend, it means that the uptrend is going to continue. In the same way, bearish thrusting lines and bearish separating lines are formed in an opposite manner and confirm the continuation of the downtrend.
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