5 Candlestick patterns
Another general tool to make inference about likely trends in stocks is a set of patterns observed in candlesticks.
Candlestick summarize the data over a given period of time, the low and high values are indicated by the black line (Call shadow), and the open and close price are the indicated by the body.
if the body is colored green or white it show the price is going up during that time. This is call a bull candle.
if the body is colored red or black it show the price is going down during that time. This is call a bear candle.
Figure 5.1: The bull and bear candles
How the shape of a candlestick changes from time to time, may reflect the aggressiveness, or lack there of, between longers and shorters.
The secuence of candles at time tell the story and/or balnce of the war between longers and shoters.
Let’s review some candlestock patterns and what they mean.