Piercing line candlestick pattern formed near the support levels and it gives us potential bullish reversal signs. The piercing line pattern consists of two candlesticks, which suggests a potential bullish reversal. It is a two-day bullish candlestick reversal pattern that appears in a downtrend.
Piercing Line Candlestick Pattern
You will get to see a downtrend before a piercing line pattern is formed. You can also say that you will see a piercing line pattern at the bottom of the down trend.
After this you will see a bearish candle. Then you will see a bullish candle with the gap down opening.
This bullish candle should close above 50% of the bearish candle. After this you will get to see the gap up opening.
- Down trend
- Gap Down
- Bullish Candle (Close above 50%)
- Gap Up
The piercing pattern is made up of two candlesticks, one is Bearish and the other is Bullish candlestick.
A piercing pattern is a bullish reversal pattern that can be found at the end of a downtrend.
Piercing pattern is a candlestick pattern formed near the support levels and it gives us potential bullish reversal signs.
This candlestick pattern is used as an indicator to enter a long position or exit the sell position.
This kind of pattern is formed when the bulls and bears, both are fighting to gain control over the prices.
Trade Setup – Piercing Line Candlestick
Above is how you can identify the piercing line pattern. Now the question arises that when and how should you take your position in the market.
As soon as you find a breakout of the bearish candle formed in the piercing line pattern. Similarly, you can make your position in the market.
You should place your stop loss below the low of the bullish candle formed in the piercing line pattern.
Example 1 – Piercing Line
In the above example, you have been explained about the piercing line pattern with the help of chart.
Example 2 – Piercing Line
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