Wednesday, March 30, 2011

Piercing Pattern

A Piercing Pattern occurs when a bullish candle on Day 2 closes above the middle of Day

1's bearish candle.Moreover, price gaps down on Day 2 only for the gap to be filled  and

closes significantly into the losses made previously in Day 1's bearish candlestick.

The rejection of the gap up by the bulls is a major bullish sign, and the fact that bulls

were able to press further up into the losses of the previous day adds even more bullish

sentiment. Bulls were successful in holding prices higher, absorbing excess supply and

increasing the level of demand.