Bullish Matching Low Pattern

by · December 31, 2009

BULLISH MATCHING LOW PATTERN (BMLOP)
short term support that may cause a reversal the following day

Characteristics:
1. Market is on a downtrend;
2. Day 1 has a long black candlestick; and
3. Day 2 has another black stick whose closing price is equal (or almost equal) to the closing price of Day 1.

Brief Explanation:
The market keeps on going down as shown by the Day 1 stick. The following day, the price opens at a higher level, continues to go up and closes at a level equal to the closing price of Day 1. This suggests short-term support. The shorts must be aware of this. This support might be followed by a reversal the next day.

Notes:
1. On Day 3, a confirmation of the downtrend reversal is necessary (through a white stick, a large gap up or a higher close).