Bullish Meeting Lines Candlestick Formation

Bullish meeting lines is a bullish market reversal pattern indicating the beginning of an uptrend after a downtrend. It is a two candlestick formation, which is somewhat rare, formed of a bearish (black or colored) candlestick and a bullish (white or colorless) candlestick. Bullish meeting lines has a strong resemblance to bullish piercing line pattern; the only difference is that the real-body of second day candlestick does not enter to the real-body of first day candlestick. This difference makes it less reliable than bullish piercing line.


The requirements of bullish meeting lines candlestick pattern are,

• The formation should occur at the end of a significant downtrend.
• The first day should be noticeable with strong bearish activity resulting in a long bearish candlestick.
• On second day there should be a bullish candlestick (often it is shorter than first day candlestick) which opens below a significant gap and closes at or around the closing price of first day candle.

Often, the opening of price below a significant gap tends short traders to close their positions and take profit. Also the increased bullish activity after some bearish days makes bears to loss their confidence resulting in market reversal.

Bullish meeting lines is a moderately reliable candlestick. The reliability increases with the prior downtrend and with increase in trading volume of second day. There is a high chance of false signals and confirmation is necessary which can be an upper close, a bullish candlestick or a gap above 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