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--- chart_analysis:candlestick_bullish_reversal_patterns [2023/07/02 15:38]
jayanthi [Hammer]
+++ chart_analysis:candlestick_bullish_reversal_patterns [2023/07/02 15:39]
jayanthi [Bullish Abandoned Baby]
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-===== Morning Star =====
-The morning star consists of three candlesticks:
-  - A long black candlestick.
-  - A small white or black candlestick that gaps below the close of the previous candlestick. This candlestick can also be a doji, in which case the pattern would be a morning doji star.
-  - A long white candlestick.
-The black candlestick confirms that the decline remains in force and selling dominates. When the second candlestick gaps down, it provides further evidence of selling pressure. However, the decline ceases or slows significantly after the gap and a small candlestick forms. The small candlestick indicates indecision and a possible reversal of trend. If the small candlestick is a doji, the chances of a reversal increase. The third long white candlestick provides bullish confirmation of the reversal.
-{{:chart_analysis:candlestick_bullish_reversal_patterns:bullrev2-mornstar-brcm.png|Broadcom Corp. (BRCM) Candlestick Morning Doji Star example chart from StockCharts.com}}
-After declining from above 180 to below 120, Broadcom (BRCM) formed a morning doji star and subsequently advanced above 160 in the next three days. These are strong reversal patterns and do not require further bullish confirmation, beyond the long white candlestick on the third day. After the advance above 160, a two-week pullback followed and the stock formed a piecing pattern (red arrow) that was confirmed with a large gap up.
-===== Bullish Abandoned Baby =====
-The bullish abandoned baby resembles the morning doji star and also consists of three candlesticks:
-  - A long black candlestick.
-  - A doji that gaps below the low of the previous candlestick.
-  - A long white candlestick that gaps above the high of the doji.
-The main difference between the morning doji star and the bullish abandoned baby are the gaps on either side of the doji. The first gap down signals that selling pressure remains strong. However, selling pressure eases and the security closes at or near the open, creating a doji. Following the doji, the gap up and long white candlestick indicate strong buying pressure and the reversal is complete. Further bullish confirmation is not required.
-{{:chart_analysis:candlestick_bullish_reversal_patterns:bullrev2-abandon-genz.png|Genzyme General (GENZ) Candlestick Abandoned Baby example chart from StockCharts.com}}
-In April, Genzyme (GENZ) declined below its 20-day EMA and began to find support in the low thirties. The stock began forming a base as early as 17-Apr, but a discernible reversal pattern failed to emerge until the end of May. The bullish abandoned baby formed with a long black candlestick, doji, and long white candlestick. The gaps on either side of the doji reinforced the bullish reversal.
 ===== The Bottom Line =====

Candlestick Bullish Reversal Patterns

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