what is PIERCING LINE CANDLESTICK PATTERN ?
This is a double candlestick pattern which gives bullish signals in the market. Piercing Candlestick Pattern: The first candle is a big bearish candle which is red in color and the second candle which is green in color is a bullish candle.
Piercing candlestick pattern is a bullish candlestick pattern that forms at bearish support. After the formation of this candlestick pattern, there is a rise in the market, which can be confirmed by looking at the volume and modern indicators (RSI & MACD).
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How to identify PIERCING CANDLESTICK PATTERN ?
Here are some things to keep in mind when identifying piercing candlestick patterns:
- We will first see a big bearish candle being formed on the support, next to it a second bullish candle will be formed on the support which will be below the low or gape down open of the first candle and the closing of the second candle will be equal to or equal to the close point of the first candle. The first will be in the middle of the body of the candle.
- Color is important in this candlestick pattern. The color of the first candle should be red and the color of the second candle should be green.
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PIERCING line CANDLESTICK PATTERN USING WITH TRADING ?
trading chart with Piercing Candlestick Pattern
When Piercing Candlestick Pattern is formed at support then we have to trade in the market keeping these things in mind: –
- Entry: – When the piercing candlestick pattern is formed on the support, after the formation of this candlestick pattern, we have to take entry in the market from whichever of the next 3 candles breaks the high of the first candle. If none of the next three candles formed after this candlestick forms break the high of the first candle, then this is not a strong signal of a market reversal. And at that time we should ignore this candle stick pattern.
- Stop loss: – Stop loss in piercing candlestick pattern should be placed slightly below the low point of the second candle.
- Target:- In this candle stick pattern, we should set the target after looking at the resistance or two or three times our sub stoploss.
Features of PIERCING line CANDLESTICK PATTERN
- This is a candlestick pattern indicating an uptrend.
- This pattern is formed at support during a down trend.
- In this double candlestick pattern, the first candle should be red and the second candle should be green.
- In this candlestick pattern, the first candle is a large bearish candle and the second candle is a bullish candle.
- After the formation of this candle stick pattern, the volume has to be seen. Only when the volume is high, there are chances of reversal in the market.
- Its candle pattern is formed at support after a long-running recession.
- Both candles of the Piercing Candlestick Pattern can be MARUBOZU.
- Piercing Candlestick Pattern: After the formation of the first candle, the second candle should open below or gap down the first candle and the closing should be in the middle of the body of the first candle or equal to the open point of the body.
- This is a bullish candlestick pattern.
- It consists of two candles.
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