Bullish Piercing Line Pattern
BULLISH PIERCING LINE PATTERN (BPLP)
bears reevaluating their positions
1. Market is on a downtrend;
2. Day 1 has a long black candlestick;
3. This is followed by a long white stick whose opening price is lower than Day 1’s low;
4. Day 2’s close is contained within Day 1’s body and it’s also above the midpoint of Day 1’s body; and
5. Day 2 fails to close above Day 1’s body.
The first black body reinforces the view that the market is moving on a downtrend. On the second day, the market opens lower through a gap. The bears want everything to go. However, the market surges toward the close. This leads the prices to close above Day 1’s close. The bears now reevaluate their short positions. The potential buyers start thinking that it might be time to take long positions.
1. An ideal BPLP will have a real white body that pushes more than half way into the previous session’s black body
2. A confirmation of the trend reversal is suggested (through a white stick, a large gap up or a higher close on the next trading day).