OK, now we are back to learning after a short vacation. Before we step into this section, let’s establish a platform for the basics in which we already know.
What we now know…about the white candlestick
-Long white candlesticks show strong buying pressure
-The longer the white candlestick is, the greater the close is above the open (***large advancement and ***buyers were aggressive)
(Keep in mind that after consistent declines, a long white candlestick can mark a potential turning point)
What we now know…about the black candlestick
-Long black candlesticks show strong selling pressure
-The longer the black candlestick is, the greater the close is below the open (indicates prices declined greatly from open and sellers were aggressive)
(Keep in mind after a long decline a long black candlestick can imply panic)
From here on out, we will be going through different patterns and consistencies or inconsistencies that both sellers and buys use to make educated assumptions on the behavior of a specific stock.
Our First interesting shape of the candle is something we call the Marubozu
Long candlesticks are called the black Marubozu, and the White Marubozu. The Marubozu’s so to speak do not have any “shadows” or “wicks” and the top of the body and bottom reflects the open and the close.
- White Marubozus form when the open equals the low and the close equals the high.
What does this mean? Buyers monitored or controlled the price from the first to the last trade
-Black Marubozus form when the open equals the high and the close equals the low.
What does this mean? Sellers monitored or controlled the price action from the first to the last trade.
