Bullish Necklines, The Bearish Meeting Lines And The Bearish Piercing Line Candlestick Patterns

Bullish Necklines, The Bearish Meeting Lines And The Bearish Piercing Line Candlestick Patterns

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Trend is your friend. But how do you know it is really your friend. Trend can only be your friend if you know that the trend is going to continue or it is about to reverse ahead. Otherwize, trend trading is going to give you a loss. Candlestick patterns can help you anticipate whether a trend is going to continue or reverse ahead. There are many candlestick patterns. Bullish Necklines is one of them. It is a two stick trend confirmation pattern that tells that the trend is expected to continue. There are two type of Neckline Patterns, the In Neck and the Out Neck. When you spot the Bullish Neckline in an uptrend, it is a signal that the trend is expected to continue for sometime.

The candle formed on the setup day should be a long bullish candle that shows a lot of buying. On the signal day a bearish candle either long or short is formed with its closing price very near the close of the setup day.

If the closing price on the second day is very near the closing price on the first day, the neckline candlestick pattern formed is known as the on neck pattern. If the closing price on the setup day is a little lower than the closing price on the second day, it is known as in neck pattern.

Not much of a difference but you should nevertheless know this difference. Both on neck and in neck pattern tell the same story, so even if you are not able of distinguish between them, doesn't make much of a difference. When this pattern appears in an uptrend, it means that the uptrend will continue in the future.

Now, let's talk about a trend reversal candlestick pattern; The Bearish Meeting Line. On the first day or what you call the setup day, you will find a long bullish candle.What this means is that heavy buying took place throughout the day. On the second day or what you call the signal day, you will find a gap opening. This gap entices the sellers to start selling that continues throughout the day. This will result in a long bearish candle on the second or what you call the signal day. This long bearish candle should have a close very near the open of the low of the day as well as the close should be very near to the close on the first or what you call the setup day. This is a Bearish Meeting Line Trend Reversal Pattern. What is means is that the trend is about to reverse itself soon!

In case of the bearish piercing line candlestick pattern, the setup day is bullish with long bullish candle. The signal day is bearish with an opening higher than the setup days high. What this means is that on the signal day sellers came rushing in, pushing prices down through the setup days opening price and below its midpoint.

When this Bearish Piercing Line Candlestick Pattern is formed, it means that the price action has lost it's momentum. This pattern usually occurs in the last stages of an uptrend and when it happens, it means that the trend is about to reverse itself.

About the Author:
Mr. Ahmad Hassam has done Masters from Harvard. Master Candlestick Charting with this 82 page PDF FREE Candlestick Guide! Get this 49 page Quantum Swing Trading Report FREE!



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