🔥 1. Bullish Engulfing Pattern (Reversal – Bullish)
Appears after a downtrend.
A small red candle is followed by a large green candle that completely engulfs the previous red body.
Signals strong buying pressure and potential upward reversal.
💡 Works best when confirmed with high volume or near a strong support zone.
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🔥 2. Bearish Engulfing Pattern (Reversal – Bearish)
Appears after an uptrend.
A small green candle is followed by a large red candle that engulfs it.
Suggests sellers are overpowering buyers → possible trend reversal down.
💡 Stronger when appearing at resistance or after overbought conditions.
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🔥 3. Hammer & Inverted Hammer (Reversal – Bullish)
Hammer: A candle with a small body at the top and a long lower wick. Appears after a downtrend.
Indicates sellers pushed price down but buyers regained control.
Inverted Hammer: Same idea but wick on top → potential reversal if followed by bullish confirmation.
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🔥 4. Shooting Star (Reversal – Bearish)
Opposite of hammer.
Small body at bottom with a long upper wick → shows buyers pushed price up but sellers regained control.
Bearish signal at resistance or after a sharp rally.
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🔥 5. Morning Star / Evening Star (Strong Reversal Patterns)
Morning Star (Bullish):
1. Large red candle
2. Small-bodied candle (indecision – could be doji)
3. Large green candle closing near/above the midpoint of the first red.
→ Signals strong bullish reversal.
Evening Star (Bearish): Opposite version, signals strong bearish reversal.
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🔥 6. Doji Candles (Indecision, Possible Reversal)
Body is very small (open ≈ close).
Means market indecision.
A Doji at key support/resistance often precedes a major move.
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