What is Bullish Engulfing Pattern?

Bullish Engulfing Candlestick Pattern generally forms at the bottom of a downtrend ,

during a decline or near a potential support. Basically it is made up of two
candlestick or can say it takes 2 day for the pattern to formed.

1. Day 1 (Smaller Bearish Candlestick): On Day 1, a bearish candlestick (Open

price is higher than the close price) is formed shown as red candlestick in the
Figure.
2. Day 2 (Larger Bullish Candlestick): On Day 2, a bullish candlestick(open price
lower than the close price) is formed which completely covers or engulfs the body of
bearish candlestick formed on Day 1, shown as green candlestick in the below
Figure.

The name of this pattern is derived from the same fact that, Day 2 candlestick
completely engulfs the Day 1 Candlestick.

For this pattern to be formed it is extremely important:

a. The open price of the Day 2 candlestick is lower than the close price of Day 1
candlestick.
b. The close price of the Day 2 candlestick is higher than the open price of Day 1
candlestick.

Bullish Engulfing Candlestick Pattern is a very common trend reversal pattern. Though it is not easy to pick this pattern but if d

The strength of this pattern is increased by the size of the engulfing candlestick.

The bigger the engulfing candlestick the more significant is the pattern. The first
day the small bearish candle may looks like a continuation of downtrend but its
small size irrespective of wicks may show that the bearish signal is weakening. This
is confirmed by the long bullish 

candlestick formed the next day. The larger candlestick tells a lot more about the
market sentiments that the bull is taking over the bear.
On combining this pattern with any other technical indicators
like Volume, Stochastic, RSI, MACD etc., further confirms this pattern and one
can quickly pick up the trend change or the buy signal. For example evidence of
higher volume on the third day further strengthen this pattern reliability. Similarly a
price gap up the next day (Day 3) support further, this pattern of trend reversal .

Corresponding Patterns of Bullish Engulfing is as follows

1. Bearish Engulfing

2. Three Outside Up

Now we have learn what Bullish Harami candlestick is, its time to see them in real life. Our website provides free stock screeni

Example of Bullish Engulfing Candlestick Pattern: Axis Bank Ltd

Next
What is Bullish Harami Candlestick Pattern?

Bullish Harami Pattern is formed at the bottom of a downtrend or near a significant support. This pa
up of two Candlestick or can say it takes 2 days for this pattern to formed.

First Day: A Long bearish candlestick is formed, shown in red in the fig below.

Second Day: A small bullish candlestick is formed shown in green in the fig below.

The pattern got its name because in Japanese: Harami means pregnant or body within. In this p
bullish candlestick is formed on day 2 which lies within the body of the bearish candle formed on da
say the big bearish candlestick of Day 1 gives an impression of a lady and the small bullish candlest
Day 2 is the protruding baby bump of that lady.

For this pattern to formed it is very important that:

a.The open price of the Day 2 candlestick is higher than the close price of Day 1candlestick.

b.The close price of the Day 2 candlestick is lower than the open price of Day 1 candlestick.

Bullish Harami pattern is considered to be a trend reversal pattern, giving investors the buy signal indicating that the bear run

The size and location of the bullish candlestick formed on Day 2 will tell more about the magnitude of this pattern. The bigger

Precaution to be taken while utilizing this Pattern.

1.It is important to reconfirm the pattern by integrating this pattern with the study of other technical indicator.
2.Like if this pattern is formed at the bottom of a downtrend together with overbought condition
strengthen strong buy signal. If it is formed in an uptrend it is of no significance.
Volume: Volume plays important role is the confirmation of this pattern. A high volume or a gap
reconfirms further trend reversal.

Now we have learnt what Bullish Harami candlestick is, its time to see them in real life. Our website provides free stock screen

Example of Bullish Harami Candlestick Pattern: Reliance Industries Ltd

What is Piercing Line Chart Pattern?

The Piercing Line Chart Pattern is a bullish candlestick reversal pattern, of moderate reliability
the downtrend, or at a possible support. This pattern is consist of 2 candlestick or one can say it t
this pattern to formed.

Day 1:Day one candlestick is the continuation of the downtrend therefore bearish in nature and it h
by its own formed in a downtrend.

Day 2:On Day two a bullish candlestick is formed, which almost covers half the body of the bearish
Day 1.

For this pattern to be valid it is extremely important:

1. The open price of the Day 2 candlestick is lower than the close of Day 1 candlestick.

2. The close price of the day 2 candlestick must close above the 50% of the body of the day 1 candle

Piercing Line Chart Pattern is an indication that the bears is losing its control and bulls are taking ove
has to wait for the third day, for this pattern to confirmed.

The Strength of this pattern is maximized, if the day two candlestick covers more than the 50
candlestick formed on Day 1. The more it covers more strong is the bullish signal. The formation of b
gap up on third day confirms this pattern reliability.
As always mentioned, by combining chart patterns with other technical indicators wave out a
generated. Therefore adding any one of the other indicators like:

Volume, Stochastic, RSI, MACD etc. with chart patterns, one can further enhance the probability
happen.

Now we have learnt what is Piercing Line Chart Pattern, it is the time to see them in real life. Our website provides free  Stock

Corresponding Patterns of Piercing Line Chart Pattern is as follows:

1. Bullish Engulfing

2. Dark Cloud Cover

Example of Bullish Piercing Chart Pattern: Karnataka Bank Ltd

What is Three Outside Up Candlestick Chart Pattern?

Three Outside Up Candlestick Chart Pattern is a bullish trend reversal

pattern of strong reliability. It is formed at the downtrend or at a
possible support. This pattern is a three day pattern or one can say it
takes three days for this pattern to be formed. If see deeply into the
pattern, its a further extension of Bullish Engulfing Candlestick
pattern or its a confirmation for Bullish Engulfing Pattern.

Day 1: On first day, a smaller bearish candlestick (Open price is higher than the close price) is formed, which is formed in the c

Day 2: On second day, a larger bullish candlestick (open price lower
than the close price) is formed which completely covers or engulfs the
body of bearish candlestick formed on Day 1, as shown in the Figure.

Day 3: On third day again a bullish candlestick is formed which closes
higher than the second day candlestick.

For this pattern to be formed it is extremely important:

a. It should formed in a downtrend.

b. The open price of the Day 2 candlestick is lower than the close
price of Day 1 candlestick.
c. The close price of the Day 2 candlestick is higher than the open
price of Day 1 candlestick.
d. The close price of the Day 3 candlestick is higher than the open
price of Day 2 candlestick.
The strength of this pattern is increased by the size of the engulfing
candlestick. The bigger the engulfing candlestick the more significant
is the pattern. The first day the small bearish candle may looks like a
continuation of downtrend but its small size shows that the bearish
signal is weakening. This is confirmed by the long bullish candlestick
formed the next day. The larger candlestick tells a lot more about the
market sentiments that the bull is taking over the bear and hence
there is an increase in price movement.

Three Outside Up Candlestick Chart Pattern by itself is a confirmed chart pattern but one has to see the overall market and oth

On combining this pattern with any other technical indicators

like Volume, Stochastic, RSI, MACD etc., further confirms this
pattern and one can quickly pick up the trend change or the buy
signal. For example evidence of higher volume on the second and
third day further strengthen this pattern reliability. Similarly a price
gap up the next day (Day 3) support further, this pattern
of trend reversal.

Now we have learnt what is Three Outside Up Candlestick Chart Pattern, it is the time to see them in real life. Our website pro

Corresponding Patterns of Three Outside Up Candlestick Chart Pattern

is as follows:

1. Bullish Engulfing

2. Three Outside Down

Three Inside Up Candlestick Chart Pattern is a bullish trend reversal pattern of high
reliability. It is formed at a downtrend or at a possible support. This pattern is a three
day candlestick pattern or one can say it takes three days for this pattern to be
formed. On closely observing this pattern, it is mere an confirmed extension
of Bullish Harami Candlestick Pattern.

First Day: On day 1, a long bearish candlestick is formed, which is just the
continuation of the downtrend. It has little significance by its own.
Second Day: On day 2, a small bullish candlestick is formed, which lies within the body of the candlestick body formed on day

Third Day: On day 3, a bullish candlestick is formed, which closes above the open
price of the candlestick formed on day 2, forming a new high.

For this pattern to formed it is very important that:

a. There should be a downtrend before the pattern to occur.

b. The open price of the Day 2 candlestick is lower than the close price of Day 1
candlestick.
b. The close price of the Day 2 candlestick is lower than the open price of Day 1
candlestick.
d. The close price of Day 3 candlestick should be higher than the close price of Day 2
candlestick.

Formation of bullish harami candlestick pattern itself speaks about the market sentiments that the bulls are trying to take ove

The size and location of the bullish candlestick formed on Day 2 will tell more about the magnitude of this pattern. The bigger
Precautions to be taken while utilizing this Pattern.

1.It is important to reconfirm the pattern by integrating this pattern with the study of
other technical indicators. Therefore adding any one of the other indicators
like Volume, Stochastic, RSI, MACD etc. with chart patterns, one can further
enhance the probability of the pattern to happen.

2.Like if this pattern is formed at the bottom of a downtrend together with overbought condition then it further strengthen st

Now we have learnt what is Three Inside Up Candlestick Pattern, it is the time to see them in real life. Our website provides  fr

Corresponding Patterns of Three Inside Up Candlestick Pattern is as follows:

1. Bullish Harami           2. Bullish Engulfing

Example of Three Inside Up Chart Pattern: United Phosphorus Ltd

Next
What is Morning Star?

Morning Star Candlestick Chart pattern is a bullish reversal pattern of high reliability. This
pattern is only valid when formed at a downtrend or at a possible support. This pattern is a
three day pattern or formed by three continuous candlestick of following characteristic.

Day 1: On first day, a large bearish candlestick is formed, representing further continuation of a
downtrend.
Day 2: On second day, a small candlestick either bullish or bearish, is formed which gaps down from the first candlestick forme

Day 3: On third day a large bullish candlestick is formed which gaps up from the candlestick
formed on Day2. It opens above the close of the Day 2 candlestick and closes atleast near the
center or midpoint of the candlestick formed on Day 1.

For this pattern to be formed it is extremely important:

a. It should formed in a downtrend.
b. The open price of the Day 2 candlestick is lower than the close price of Day 1 candlestick.
c. The close price of the Day 2 candlestick is also lower than the close price of Day 1
candlestick.
d. The close price of the Day 3 candlestick is higher than the 50% of the Day 1 candlestick.

The strength of this pattern depends a lot on the size of the candlestick. The bigger bearish
candlestick formed on day 1 in continuation of previous downtrend, shows the market
sentiments is strongly under the control of bears. The second day formation of small candlestick
(either bullish or bearish or neutral) with a gap down indicates that the bears are still holding
the position but they are not able to push the price much lower further indicates that the bears
strength is loosening. A bullish candlestick on day 2 speaks a lot more about bears weakness.
Formation of long bullish candlestick on Day 3 confirm the pattern and shows that bull are
taking over the market over the bulls strongly. If the third day candlestick opens with a gap up
and closes above or atleast near the midpoint of the Day 1 candlestick, it indicates a strong
trend reversal and a buy signal.

Morning Star Candlestick Chart Pattern by itself is useful in confirming trend reversal but one
has to see the overall market and other technical indicators for its strength and reliability. Many
traders also use price oscillators such as the MACD and RSI or volume to confirm the reversal.

Others uses the size of the candlestick to see the reliability of this patten.

Precautions to be taken while utilizing this Pattern.

1.It is important to reconfirm the pattern by integrating this pattern with the study of other
technical indicators. Therefore adding any one of the other indicators like Volume, Stochastic,
RSI, MACD etc. with chart patterns, one can further enhance the probability of the pattern
reliability.
2.Like if this pattern is formed at the bottom of a downtrend together with overbought condition
then it further strengthen strong buy signal. If it is formed in an uptrend or in sideways market
it is of no significance.

Now we have learnt what is Morning Star Candlestick Chart pattern, it is the time to see them in real life. Our website provide

Corresponding Patterns of Three Inside Up Candlestick Pattern is as follows:

1. Morning Doji Star        2. Doji

Example of Morning Start Chart Pattern: Educomp Solutions Ltd.

Next
Tutorial on Abandoned Baby Bullish Candlestick Pattern

Now we have learnt what is Abandoned Baby Bullish Candlestick Chart pattern, it is the time to see them in real life. Our webs

Example of Abandoned Baby Bullish Chart Pattern