Bullish Meeting Lines Pattern

by · December 31, 2009

BULLISH MEETING LINES PATTERN (BMLP)
a stalemate between the bulls and bears

Characteristics:
1. Market is on a downtrend;
2. Day 1 has a black candlestick;
3. Day 2 has a long white stick. Its body is lower than the prior trend;
4. The closing prices are the same (or almost the same) for both days; and
5. The two sticks are long but the second stick may be shorter than the first.

Brief Explanation:
This pattern appears during a decline. The first stick is black and long. But the next day opens sharply lower making the bears feel positive. Then the bulls do a counterstrike pushing the prices up and approaching a close equal to the prior close. The downtrend has been breached.

Notes:
1. The BMLP is comparable to the Bullish Piercing Line Pattern (BPLP). The BPLP is a more significant bottom reversal though.
2. On Day 3, a confirmation of the reversal is necessary (through a white stick, a large gap up or a higher close).