Bearish Meeting Lines Candlestick Pattern

Bearish meeting lines is a bearish market reversal candlestick pattern indicating the beginning of a downtrend after an uptrend. It is a two candlestick pattern formed of a bullish (colorless or white) candlestick and a bearish (colored or dark) candlestick. The pattern resembles Bearish Dark Cloud Cover pattern, but here the second candlestick does not enter into first day candlestick’s real-body, and also the pattern is less reliable than dark cloud cover.


The requirements of bearish meeting lines formation include,

• The pattern should form at the end of a significant uptrend.
• There should be a long bullish candlestick on first day.
• There should be a long bearish candlestick (it’s often shorter than first day candlestick) which opens above a significant gap and closes at or around the closing price of first day candlestick.

Usually the opening of price above a significant gap after a long bullish movement tempts traders to close their long positions and take their profit. The resulting bearish activity encourages bears and the market closes at or near the closing price of the previous day.

Bearish meeting lines is a moderately reliable pattern. Reliability increases with the prior uptrend and with increase in trading volume on second day. The pattern is less reliable when formed in a sidewise moving market. Confirmation of trend-reversal in required, which can be a lower close, a bearish candlestick or a gap down opening on third trading day.

NobleTrading.com Offers Online Stock Trading, Online Options Trading
Online Futures Trading, Online Forex Trading
Worldwide Brokerage Service, Day Trading Brokerage