Attention! This saying has been circulating in the market for a long time! A simple mnemonic represents a bottom pattern, summarized very accurately. That is 'long shadows suppress short columns, and the market will be fierce like a tiger.' Today, I will clarify this pattern step by step, summarizing several core points that even beginners can easily understand.
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'Long shadows suppress short columns' refers to a long bearish candlestick indicating a price drop of more than 5%, where the larger the drop, the greater the selling pressure. The 'short columns' refer to a decrease in trading volume.
This pattern does not appear in any position; it generally occurs at the beginning of an upward trend, when moving averages are in a bullish trend, and there has been a limit-up previously, indicating strong buying power.
After a wave of price increase, a correction begins, during which a long bearish candlestick appears with decreasing trading volume, and during the decline, the price does not break important support levels, such as previous lows or significant moving averages.
Thus, the 'long shadows suppress short columns' pattern is actually a method used by strong hands to wash out positions. It clears profit-taking and selling pressure above, reducing future selling force. Such a large bearish candlestick with such low volume indicates that strong hands control the market.
In summary, in an uptrend, long bearish candlesticks + decreasing volume, without breaking key support, signify the washing out by strong hands. Conversely, if the price is consolidating at a high level, with long bearish candlesticks + massive volume, breaking support, followed by continuous decreasing volume and a bearish trend, it is very likely that strong hands are offloading.
Alright! These are the core points of 'long shadows suppress short columns.' We have prepared case images below, so remember to look at the article in conjunction with the case images. I hope this provides inspiration and help for everyone, as it is the most fundamental content to thoroughly understand. See you in the next issue!