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Wednesday, April 22, 2009

Bullish Kicking Candlestick Pattern

Bullish kicking is a rare but highly reliable bullish candlestick pattern which indicates the beginning of a new uptrend. The pattern consists of two opposite candlesticks – one bearish (black or colored) candlestick and one bullish (white or colorless) candlestick. In bullish kicking pattern, both candlesticks are marubozu (having no or very small upper and lower shadows). This pattern has a strong resemblance to bullish separating lines pattern, the only difference is that it has a gap between the two candlesticks.



Requirements of bullish kicking candlestick pattern include,
  • Prior/prevailing trend is not important with this pattern.
  • On first day, there should be a bearish marubozu candlestick; closing at its low.
  • On second day there should be a bullish marubozu candlestick, which open above an upside gap and closes at its high.
The opening of second day candlestick way above the first day candlestick and the continuous bullish activity of the day indicated by close at the top sends a strong signal that the market is bullish. More over, the price of second day never enters the first days range and the new gap formed act like a new support level indicating that it is difficult to move the prices down.

Bearish kicking candlestick pattern is considered as a highly reliable one. The reliability increases with increase trading volume (especially on second day), increase in length of candlestick bodies, and increase in gap between candlesticks. Confirmation of trend change is still suggested which can be an increase in trading volume, a new upper gap (occurs most time), a bullish candlestick or an upper close on next trading day.

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