Chapter 2 READING CANDLESTICK CHARTS
Bullish Candlestick Formations
Hammer -The hammer is a bullish pattern if itoccurs after a significant downtrend. If the lineoccurs after a significant uptrend, it is called ahanging man. A small body and a long wick identifya hammer. The body can be clear or filled in.
Piercing Line -This is a bullish pattern. The firstcandle is a long bear candle followed by a long bullcandle. The bull candle opens lower than the bear’slow but closes more than halfway above the middleof the bear candle’s body.
Bullish Engulfing Lines -This pattern is stronglybullish if it occurs after a significant downtrend (itmay serve as a reversal pattern). It occurs when asmall bearish (filled-in) candle is engulfed by a largebullish (empty) candle.
