TECHNICAL ANALYSIS PART II.pdf

TECHNICAL
ANALYSIS
CANDLESTICK PATTERNS

PART - II

Single
Candlestick
Pattern

Multiple
Candlestick
Patterns

Candlestick Pattern Assumptions

The Marubozu

1. Remember the rules based on which candlesticks work.
2. Marubozu is the only pattern which violates rule number 3, i.e.
Look for the prior trend.
3. A bullish marubozu indicates bullishness.
1. Buy around the closing price of a bullish marubozu
2. Keep the low of the marubozu as the stoploss
4. A bearish marubozu indicates bearishness.
1. Sell around the closing price of a bearish marubozu
2. Keep the high of the marubozu as the stoploss
5. An aggressive trader can place the trade on the same day as the
pattern forms.
6. Risk-averse traders can place the trade on the next day after
ensuring that it obeys rule number 1, i.e. Buy strength, and Sell
weakness.
7. Abnormal candle lengths should not be traded.
1. Short candle indicates subdued activity.
2. Long candle indicates extreme activity; however, placing
stoploss becomes an issue.

The Spinning Top

•A spinning top has a small real body. The upper and lower
shadows are almost equal.
•The color does not matter. What matters is the open and close
prices are very close to each other.
•Spinning tops convey indecision in the market with both bulls and
bears being in equal control.
•Spinning top at the top end of the rally indicates that either the
bulls are pausing before they can resume the uptrend further or the
bears are preparing to break the trend.
•Spinning top at the bottom end of the rally indicates that either the
bears are pausing before they can resume the downtrend further or
the bulls are preparing to break the trend and take the markets
higher.

EXAMPLE

EXAMPLE

EXAMPLE

The Dojis

• Doji’s are very similar to spinning tops. Doji also conveys indecision in the
market. By definition, dojis do not have a real body. However, in reality,
even if a wafer-thin body appears, it is acceptable.
• A trader’s stance based on dojis is similar to the stance taken when a spinning
top occurs.

EXAMPLE

EXAMPLE

Paper Umbrella
HAMMER/HANGING MAN INVERTED HAMMER/SHOOTING STAR

Paper Umbrella

• A paper umbrella has a long lower shadow and a small real body. In the case of
the paper umbrella, the lower shadow should be at least twice the real body’s
length.
• Since the open and close prices are close to each other, the paper umbrella’s
color should not matter.
• If a paper umbrella appears at the bottom of a downtrend, it is called the
‘hammer.’
• If the paper umbrella appears at the top end of an uptrend, it is called the
hanging man.
• The hammer is a bullish pattern, and one should look at buying opportunities
when it appears.
• The low of the hammer acts as the stop-loss price trade.
• The hanging man is a bearish pattern which appears at the top end of the trend,
and one should look at selling opportunities when it appears.
• The high of the hanging man acts as the stop loss price for the trade.
• The shooting star is a bearish pattern which appears at the top end of the trend.
One should look at shorting opportunities when a shooting star appears.
• The high of the shooting star will be the stop loss price for the trade.

Ttt
-
_e↓Acition
Demand
&Supply
☆
Assumption
-
News
✗
-
How
✓
why
✗F.tt?&-xnd--
Direction
-
History
_
I
:#
☆
charttypes
-
3-Line
,
Bar
,-
↑↑ Candles
¥
:
O
-
I

Candlesticks
1-
=Lingle multiple
.
Double
&$
,
triple
"?§§µ

TECHNICAL
ANALYSIS
CANDLESTICK PATTERNS

PART - II

Single
Candlestick
Pattern

Multiple
Candlestick
Patterns

Candlestick Pattern Assumptions

The Marubozu

1. Remember the rules based on which candlesticks work.
2. Marubozu is the only pattern which violates rule number 3, i.e.
Look for the prior trend.
3. A bullish marubozu indicates bullishness.
1. Buy around the closing price of a bullish marubozu
2. Keep the low of the marubozu as the stoploss
4. A bearish marubozu indicates bearishness.
1. Sell around the closing price of a bearish marubozu
2. Keep the high of the marubozu as the stoploss
5. An aggressive trader can place the trade on the same day as the
pattern forms.
6. Risk-averse traders can place the trade on the next day after
ensuring that it obeys rule number 1, i.e. Buy strength, and Sell
weakness.
7. Abnormal candle lengths should not be traded.
1. Short candle indicates subdued activity.
2. Long candle indicates extreme activity; however, placing
stoploss becomes an issue.

The Spinning Top

•A spinning top has a small real body. The upper and lower
shadows are almost equal.
•The color does not matter. What matters is the open and close
prices are very close to each other.
•Spinning tops convey indecision in the market with both bulls and
bears being in equal control.
•Spinning top at the top end of the rally indicates that either the
bulls are pausing before they can resume the uptrend further or the
bears are preparing to break the trend.
•Spinning top at the bottom end of the rally indicates that either the
bears are pausing before they can resume the downtrend further or
the bulls are preparing to break the trend and take the markets
higher.

EXAMPLE

EXAMPLE

EXAMPLE

The Dojis

• Doji’s are very similar to spinning tops. Doji also conveys indecision in the
market. By definition, dojis do not have a real body. However, in reality,
even if a wafer-thin body appears, it is acceptable.
• A trader’s stance based on dojis is similar to the stance taken when a spinning
top occurs.

EXAMPLE

EXAMPLE

Paper Umbrella
HAMMER/HANGING MAN INVERTED HAMMER/SHOOTING STAR

Paper Umbrella

• A paper umbrella has a long lower shadow and a small real body. In the case of
the paper umbrella, the lower shadow should be at least twice the real body’s
length.
• Since the open and close prices are close to each other, the paper umbrella’s
color should not matter.
• If a paper umbrella appears at the bottom of a downtrend, it is called the
‘hammer.’
• If the paper umbrella appears at the top end of an uptrend, it is called the
hanging man.
• The hammer is a bullish pattern, and one should look at buying opportunities
when it appears.
• The low of the hammer acts as the stop-loss price trade.
• The hanging man is a bearish pattern which appears at the top end of the trend,
and one should look at selling opportunities when it appears.
• The high of the hanging man acts as the stop loss price for the trade.
• The shooting star is a bearish pattern which appears at the top end of the trend.
One should look at shorting opportunities when a shooting star appears.
• The high of the shooting star will be the stop loss price for the trade.

1
A
*
L
¥

IDEWEY
_
✗45%
SP
17Lj)
8-Bong%
ᵗ¥g÷
:\
.
<{
iifeikitity
I-v-f://t.at
✓
%÷
;
"
"
heme
↓*¥FÑ
,
Bullitt
f-
%
-2
]
>
Retailer
V%me-
'
-96
•
*
im
→
!
wed
µ
/
✓ →
gg.jo#.%FanH..E--iit--ioend----
B
'
Ly

Price
•
_
☆
-
Petit
3I-¥
-
>
3¥
-→
32--2-8
No↓
/¨÷÷¥
.
↓
A-
-2-5
.
'
CMI
≤
Ip
"
→
E-
-
✗
F-
++
I
-
T
"
"

TECHNICAL
ANALYSIS
CANDLESTICK PATTERNS

PART - II

Single
Candlestick
Pattern

Multiple
Candlestick
Patterns

Candlestick Pattern Assumptions

The Marubozu

1. Remember the rules based on which candlesticks work.
2. Marubozu is the only pattern which violates rule number 3, i.e.
Look for the prior trend.
3. A bullish marubozu indicates bullishness.
1. Buy around the closing price of a bullish marubozu
2. Keep the low of the marubozu as the stoploss
4. A bearish marubozu indicates bearishness.
1. Sell around the closing price of a bearish marubozu
2. Keep the high of the marubozu as the stoploss
5. An aggressive trader can place the trade on the same day as the
pattern forms.
6. Risk-averse traders can place the trade on the next day after
ensuring that it obeys rule number 1, i.e. Buy strength, and Sell
weakness.
7. Abnormal candle lengths should not be traded.
1. Short candle indicates subdued activity.
2. Long candle indicates extreme activity; however, placing
stoploss becomes an issue.

The Spinning Top

•A spinning top has a small real body. The upper and lower
shadows are almost equal.
•The color does not matter. What matters is the open and close
prices are very close to each other.
•Spinning tops convey indecision in the market with both bulls and
bears being in equal control.
•Spinning top at the top end of the rally indicates that either the
bulls are pausing before they can resume the uptrend further or the
bears are preparing to break the trend.
•Spinning top at the bottom end of the rally indicates that either the
bears are pausing before they can resume the downtrend further or
the bulls are preparing to break the trend and take the markets
higher.

EXAMPLE

EXAMPLE

EXAMPLE

The Dojis

• Doji’s are very similar to spinning tops. Doji also conveys indecision in the
market. By definition, dojis do not have a real body. However, in reality,
even if a wafer-thin body appears, it is acceptable.
• A trader’s stance based on dojis is similar to the stance taken when a spinning
top occurs.

EXAMPLE

EXAMPLE

Paper Umbrella
HAMMER/HANGING MAN INVERTED HAMMER/SHOOTING STAR

Paper Umbrella

• A paper umbrella has a long lower shadow and a small real body. In the case of
the paper umbrella, the lower shadow should be at least twice the real body’s
length.
• Since the open and close prices are close to each other, the paper umbrella’s
color should not matter.
• If a paper umbrella appears at the bottom of a downtrend, it is called the
‘hammer.’
• If the paper umbrella appears at the top end of an uptrend, it is called the
hanging man.
• The hammer is a bullish pattern, and one should look at buying opportunities
when it appears.
• The low of the hammer acts as the stop-loss price trade.
• The hanging man is a bearish pattern which appears at the top end of the trend,
and one should look at selling opportunities when it appears.
• The high of the hanging man acts as the stop loss price for the trade.
• The shooting star is a bearish pattern which appears at the top end of the trend.
One should look at shorting opportunities when a shooting star appears.
• The high of the shooting star will be the stop loss price for the trade.

:
✓
÷
:
¥
.
"
u
"
✓
,
i

TECHNICAL
ANALYSIS
CANDLESTICK PATTERNS

PART - II

Single
Candlestick
Pattern

Multiple
Candlestick
Patterns

Candlestick Pattern Assumptions

The Marubozu

1. Remember the rules based on which candlesticks work.
2. Marubozu is the only pattern which violates rule number 3, i.e.
Look for the prior trend.
3. A bullish marubozu indicates bullishness.
1. Buy around the closing price of a bullish marubozu
2. Keep the low of the marubozu as the stoploss
4. A bearish marubozu indicates bearishness.
1. Sell around the closing price of a bearish marubozu
2. Keep the high of the marubozu as the stoploss
5. An aggressive trader can place the trade on the same day as the
pattern forms.
6. Risk-averse traders can place the trade on the next day after
ensuring that it obeys rule number 1, i.e. Buy strength, and Sell
weakness.
7. Abnormal candle lengths should not be traded.
1. Short candle indicates subdued activity.
2. Long candle indicates extreme activity; however, placing
stoploss becomes an issue.

The Spinning Top

•A spinning top has a small real body. The upper and lower
shadows are almost equal.
•The color does not matter. What matters is the open and close
prices are very close to each other.
•Spinning tops convey indecision in the market with both bulls and
bears being in equal control.
•Spinning top at the top end of the rally indicates that either the
bulls are pausing before they can resume the uptrend further or the
bears are preparing to break the trend.
•Spinning top at the bottom end of the rally indicates that either the
bears are pausing before they can resume the downtrend further or
the bulls are preparing to break the trend and take the markets
higher.

EXAMPLE

EXAMPLE

EXAMPLE

The Dojis

• Doji’s are very similar to spinning tops. Doji also conveys indecision in the
market. By definition, dojis do not have a real body. However, in reality,
even if a wafer-thin body appears, it is acceptable.
• A trader’s stance based on dojis is similar to the stance taken when a spinning
top occurs.

EXAMPLE

EXAMPLE

Paper Umbrella
HAMMER/HANGING MAN INVERTED HAMMER/SHOOTING STAR

Paper Umbrella

• A paper umbrella has a long lower shadow and a small real body. In the case of
the paper umbrella, the lower shadow should be at least twice the real body’s
length.
• Since the open and close prices are close to each other, the paper umbrella’s
color should not matter.
• If a paper umbrella appears at the bottom of a downtrend, it is called the
‘hammer.’
• If the paper umbrella appears at the top end of an uptrend, it is called the
hanging man.
• The hammer is a bullish pattern, and one should look at buying opportunities
when it appears.
• The low of the hammer acts as the stop-loss price trade.
• The hanging man is a bearish pattern which appears at the top end of the trend,
and one should look at selling opportunities when it appears.
• The high of the hanging man acts as the stop loss price for the trade.
• The shooting star is a bearish pattern which appears at the top end of the trend.
One should look at shorting opportunities when a shooting star appears.
• The high of the shooting star will be the stop loss price for the trade.

§
✓
✓
✓
✓
"
OO O
-
\
I
=

TECHNICAL
ANALYSIS
CANDLESTICK PATTERNS

PART - II

Single
Candlestick
Pattern

Multiple
Candlestick
Patterns

Candlestick Pattern Assumptions

The Marubozu

1. Remember the rules based on which candlesticks work.
2. Marubozu is the only pattern which violates rule number 3, i.e.
Look for the prior trend.
3. A bullish marubozu indicates bullishness.
1. Buy around the closing price of a bullish marubozu
2. Keep the low of the marubozu as the stoploss
4. A bearish marubozu indicates bearishness.
1. Sell around the closing price of a bearish marubozu
2. Keep the high of the marubozu as the stoploss
5. An aggressive trader can place the trade on the same day as the
pattern forms.
6. Risk-averse traders can place the trade on the next day after
ensuring that it obeys rule number 1, i.e. Buy strength, and Sell
weakness.
7. Abnormal candle lengths should not be traded.
1. Short candle indicates subdued activity.
2. Long candle indicates extreme activity; however, placing
stoploss becomes an issue.

The Spinning Top

•A spinning top has a small real body. The upper and lower
shadows are almost equal.
•The color does not matter. What matters is the open and close
prices are very close to each other.
•Spinning tops convey indecision in the market with both bulls and
bears being in equal control.
•Spinning top at the top end of the rally indicates that either the
bulls are pausing before they can resume the uptrend further or the
bears are preparing to break the trend.
•Spinning top at the bottom end of the rally indicates that either the
bears are pausing before they can resume the downtrend further or
the bulls are preparing to break the trend and take the markets
higher.

EXAMPLE

EXAMPLE

EXAMPLE

The Dojis

• Doji’s are very similar to spinning tops. Doji also conveys indecision in the
market. By definition, dojis do not have a real body. However, in reality,
even if a wafer-thin body appears, it is acceptable.
• A trader’s stance based on dojis is similar to the stance taken when a spinning
top occurs.

EXAMPLE

EXAMPLE

Paper Umbrella
HAMMER/HANGING MAN INVERTED HAMMER/SHOOTING STAR

Paper Umbrella

• A paper umbrella has a long lower shadow and a small real body. In the case of
the paper umbrella, the lower shadow should be at least twice the real body’s
length.
• Since the open and close prices are close to each other, the paper umbrella’s
color should not matter.
• If a paper umbrella appears at the bottom of a downtrend, it is called the
‘hammer.’
• If the paper umbrella appears at the top end of an uptrend, it is called the
hanging man.
• The hammer is a bullish pattern, and one should look at buying opportunities
when it appears.
• The low of the hammer acts as the stop-loss price trade.
• The hanging man is a bearish pattern which appears at the top end of the trend,
and one should look at selling opportunities when it appears.
• The high of the hanging man acts as the stop loss price for the trade.
• The shooting star is a bearish pattern which appears at the top end of the trend.
One should look at shorting opportunities when a shooting star appears.
• The high of the shooting star will be the stop loss price for the trade.

✓

SpinningTop
☒ji_
-
-
_
ffonfision]
Ttaltcwait
)
H
.
"
1
"
◦
-
HK
Y
E
°☐
::c
☐;"
.
"¥É
◦
-
ok "
Nomad
go,
fame
,pn
,
Dragon
<
◦
'
i.
py
L
4oz
A
f)
Weak
,
ii
)
:#
too
gf.no
.
"
Lin
:)7hr1

TECHNICAL
ANALYSIS
CANDLESTICK PATTERNS

PART - II

Single
Candlestick
Pattern

Multiple
Candlestick
Patterns

Candlestick Pattern Assumptions

The Marubozu

1. Remember the rules based on which candlesticks work.
2. Marubozu is the only pattern which violates rule number 3, i.e.
Look for the prior trend.
3. A bullish marubozu indicates bullishness.
1. Buy around the closing price of a bullish marubozu
2. Keep the low of the marubozu as the stoploss
4. A bearish marubozu indicates bearishness.
1. Sell around the closing price of a bearish marubozu
2. Keep the high of the marubozu as the stoploss
5. An aggressive trader can place the trade on the same day as the
pattern forms.
6. Risk-averse traders can place the trade on the next day after
ensuring that it obeys rule number 1, i.e. Buy strength, and Sell
weakness.
7. Abnormal candle lengths should not be traded.
1. Short candle indicates subdued activity.
2. Long candle indicates extreme activity; however, placing
stoploss becomes an issue.

The Spinning Top

•A spinning top has a small real body. The upper and lower
shadows are almost equal.
•The color does not matter. What matters is the open and close
prices are very close to each other.
•Spinning tops convey indecision in the market with both bulls and
bears being in equal control.
•Spinning top at the top end of the rally indicates that either the
bulls are pausing before they can resume the uptrend further or the
bears are preparing to break the trend.
•Spinning top at the bottom end of the rally indicates that either the
bears are pausing before they can resume the downtrend further or
the bulls are preparing to break the trend and take the markets
higher.

EXAMPLE

EXAMPLE

EXAMPLE

The Dojis

• Doji’s are very similar to spinning tops. Doji also conveys indecision in the
market. By definition, dojis do not have a real body. However, in reality,
even if a wafer-thin body appears, it is acceptable.
• A trader’s stance based on dojis is similar to the stance taken when a spinning
top occurs.

EXAMPLE

EXAMPLE

Paper Umbrella
HAMMER/HANGING MAN INVERTED HAMMER/SHOOTING STAR

Paper Umbrella

• A paper umbrella has a long lower shadow and a small real body. In the case of
the paper umbrella, the lower shadow should be at least twice the real body’s
length.
• Since the open and close prices are close to each other, the paper umbrella’s
color should not matter.
• If a paper umbrella appears at the bottom of a downtrend, it is called the
‘hammer.’
• If the paper umbrella appears at the top end of an uptrend, it is called the
hanging man.
• The hammer is a bullish pattern, and one should look at buying opportunities
when it appears.
• The low of the hammer acts as the stop-loss price trade.
• The hanging man is a bearish pattern which appears at the top end of the trend,
and one should look at selling opportunities when it appears.
• The high of the hanging man acts as the stop loss price for the trade.
• The shooting star is a bearish pattern which appears at the top end of the trend.
One should look at shorting opportunities when a shooting star appears.
• The high of the shooting star will be the stop loss price for the trade.

◦
if
.
00B¥
,
ooo
?°
°
%
ooo
⑤
00%-5

TECHNICAL
ANALYSIS
CANDLESTICK PATTERNS

PART - II

Single
Candlestick
Pattern

Multiple
Candlestick
Patterns

Candlestick Pattern Assumptions

The Marubozu

1. Remember the rules based on which candlesticks work.
2. Marubozu is the only pattern which violates rule number 3, i.e.
Look for the prior trend.
3. A bullish marubozu indicates bullishness.
1. Buy around the closing price of a bullish marubozu
2. Keep the low of the marubozu as the stoploss
4. A bearish marubozu indicates bearishness.
1. Sell around the closing price of a bearish marubozu
2. Keep the high of the marubozu as the stoploss
5. An aggressive trader can place the trade on the same day as the
pattern forms.
6. Risk-averse traders can place the trade on the next day after
ensuring that it obeys rule number 1, i.e. Buy strength, and Sell
weakness.
7. Abnormal candle lengths should not be traded.
1. Short candle indicates subdued activity.
2. Long candle indicates extreme activity; however, placing
stoploss becomes an issue.

The Spinning Top

•A spinning top has a small real body. The upper and lower
shadows are almost equal.
•The color does not matter. What matters is the open and close
prices are very close to each other.
•Spinning tops convey indecision in the market with both bulls and
bears being in equal control.
•Spinning top at the top end of the rally indicates that either the
bulls are pausing before they can resume the uptrend further or the
bears are preparing to break the trend.
•Spinning top at the bottom end of the rally indicates that either the
bears are pausing before they can resume the downtrend further or
the bulls are preparing to break the trend and take the markets
higher.

EXAMPLE

EXAMPLE

EXAMPLE

The Dojis

• Doji’s are very similar to spinning tops. Doji also conveys indecision in the
market. By definition, dojis do not have a real body. However, in reality,
even if a wafer-thin body appears, it is acceptable.
• A trader’s stance based on dojis is similar to the stance taken when a spinning
top occurs.

EXAMPLE

EXAMPLE

Paper Umbrella
HAMMER/HANGING MAN INVERTED HAMMER/SHOOTING STAR

Paper Umbrella

• A paper umbrella has a long lower shadow and a small real body. In the case of
the paper umbrella, the lower shadow should be at least twice the real body’s
length.
• Since the open and close prices are close to each other, the paper umbrella’s
color should not matter.
• If a paper umbrella appears at the bottom of a downtrend, it is called the
‘hammer.’
• If the paper umbrella appears at the top end of an uptrend, it is called the
hanging man.
• The hammer is a bullish pattern, and one should look at buying opportunities
when it appears.
• The low of the hammer acts as the stop-loss price trade.
• The hanging man is a bearish pattern which appears at the top end of the trend,
and one should look at selling opportunities when it appears.
• The high of the hanging man acts as the stop loss price for the trade.
• The shooting star is a bearish pattern which appears at the top end of the trend.
One should look at shorting opportunities when a shooting star appears.
• The high of the shooting star will be the stop loss price for the trade.

%%÷:*j¥¥É¥E¥¥
%

TECHNICAL
ANALYSIS
CANDLESTICK PATTERNS

PART - II

Single
Candlestick
Pattern

Multiple
Candlestick
Patterns

Candlestick Pattern Assumptions

The Marubozu

1. Remember the rules based on which candlesticks work.
2. Marubozu is the only pattern which violates rule number 3, i.e.
Look for the prior trend.
3. A bullish marubozu indicates bullishness.
1. Buy around the closing price of a bullish marubozu
2. Keep the low of the marubozu as the stoploss
4. A bearish marubozu indicates bearishness.
1. Sell around the closing price of a bearish marubozu
2. Keep the high of the marubozu as the stoploss
5. An aggressive trader can place the trade on the same day as the
pattern forms.
6. Risk-averse traders can place the trade on the next day after
ensuring that it obeys rule number 1, i.e. Buy strength, and Sell
weakness.
7. Abnormal candle lengths should not be traded.
1. Short candle indicates subdued activity.
2. Long candle indicates extreme activity; however, placing
stoploss becomes an issue.

The Spinning Top

•A spinning top has a small real body. The upper and lower
shadows are almost equal.
•The color does not matter. What matters is the open and close
prices are very close to each other.
•Spinning tops convey indecision in the market with both bulls and
bears being in equal control.
•Spinning top at the top end of the rally indicates that either the
bulls are pausing before they can resume the uptrend further or the
bears are preparing to break the trend.
•Spinning top at the bottom end of the rally indicates that either the
bears are pausing before they can resume the downtrend further or
the bulls are preparing to break the trend and take the markets
higher.

EXAMPLE

EXAMPLE

EXAMPLE

The Dojis

• Doji’s are very similar to spinning tops. Doji also conveys indecision in the
market. By definition, dojis do not have a real body. However, in reality,
even if a wafer-thin body appears, it is acceptable.
• A trader’s stance based on dojis is similar to the stance taken when a spinning
top occurs.

EXAMPLE

EXAMPLE

Paper Umbrella
HAMMER/HANGING MAN INVERTED HAMMER/SHOOTING STAR

Paper Umbrella

• A paper umbrella has a long lower shadow and a small real body. In the case of
the paper umbrella, the lower shadow should be at least twice the real body’s
length.
• Since the open and close prices are close to each other, the paper umbrella’s
color should not matter.
• If a paper umbrella appears at the bottom of a downtrend, it is called the
‘hammer.’
• If the paper umbrella appears at the top end of an uptrend, it is called the
hanging man.
• The hammer is a bullish pattern, and one should look at buying opportunities
when it appears.
• The low of the hammer acts as the stop-loss price trade.
• The hanging man is a bearish pattern which appears at the top end of the trend,
and one should look at selling opportunities when it appears.
• The high of the hanging man acts as the stop loss price for the trade.
• The shooting star is a bearish pattern which appears at the top end of the trend.
One should look at shorting opportunities when a shooting star appears.
• The high of the shooting star will be the stop loss price for the trade.

10*-01
-
to
-
15
<{÷:÷÷--
-

TECHNICAL
ANALYSIS
CANDLESTICK PATTERNS

PART - II

Single
Candlestick
Pattern

Multiple
Candlestick
Patterns

Candlestick Pattern Assumptions

The Marubozu

1. Remember the rules based on which candlesticks work.
2. Marubozu is the only pattern which violates rule number 3, i.e.
Look for the prior trend.
3. A bullish marubozu indicates bullishness.
1. Buy around the closing price of a bullish marubozu
2. Keep the low of the marubozu as the stoploss
4. A bearish marubozu indicates bearishness.
1. Sell around the closing price of a bearish marubozu
2. Keep the high of the marubozu as the stoploss
5. An aggressive trader can place the trade on the same day as the
pattern forms.
6. Risk-averse traders can place the trade on the next day after
ensuring that it obeys rule number 1, i.e. Buy strength, and Sell
weakness.
7. Abnormal candle lengths should not be traded.
1. Short candle indicates subdued activity.
2. Long candle indicates extreme activity; however, placing
stoploss becomes an issue.

The Spinning Top

•A spinning top has a small real body. The upper and lower
shadows are almost equal.
•The color does not matter. What matters is the open and close
prices are very close to each other.
•Spinning tops convey indecision in the market with both bulls and
bears being in equal control.
•Spinning top at the top end of the rally indicates that either the
bulls are pausing before they can resume the uptrend further or the
bears are preparing to break the trend.
•Spinning top at the bottom end of the rally indicates that either the
bears are pausing before they can resume the downtrend further or
the bulls are preparing to break the trend and take the markets
higher.

EXAMPLE

EXAMPLE

EXAMPLE

The Dojis

• Doji’s are very similar to spinning tops. Doji also conveys indecision in the
market. By definition, dojis do not have a real body. However, in reality,
even if a wafer-thin body appears, it is acceptable.
• A trader’s stance based on dojis is similar to the stance taken when a spinning
top occurs.

EXAMPLE

EXAMPLE

Paper Umbrella
HAMMER/HANGING MAN INVERTED HAMMER/SHOOTING STAR

Paper Umbrella

• A paper umbrella has a long lower shadow and a small real body. In the case of
the paper umbrella, the lower shadow should be at least twice the real body’s
length.
• Since the open and close prices are close to each other, the paper umbrella’s
color should not matter.
• If a paper umbrella appears at the bottom of a downtrend, it is called the
‘hammer.’
• If the paper umbrella appears at the top end of an uptrend, it is called the
hanging man.
• The hammer is a bullish pattern, and one should look at buying opportunities
when it appears.
• The low of the hammer acts as the stop-loss price trade.
• The hanging man is a bearish pattern which appears at the top end of the trend,
and one should look at selling opportunities when it appears.
• The high of the hanging man acts as the stop loss price for the trade.
• The shooting star is a bearish pattern which appears at the top end of the trend.
One should look at shorting opportunities when a shooting star appears.
• The high of the shooting star will be the stop loss price for the trade.

•
i
É
-
-
-
-
-0,70
'

TECHNICAL
ANALYSIS
CANDLESTICK PATTERNS

PART - II

Single
Candlestick
Pattern

Multiple
Candlestick
Patterns

Candlestick Pattern Assumptions

The Marubozu

1. Remember the rules based on which candlesticks work.
2. Marubozu is the only pattern which violates rule number 3, i.e.
Look for the prior trend.
3. A bullish marubozu indicates bullishness.
1. Buy around the closing price of a bullish marubozu
2. Keep the low of the marubozu as the stoploss
4. A bearish marubozu indicates bearishness.
1. Sell around the closing price of a bearish marubozu
2. Keep the high of the marubozu as the stoploss
5. An aggressive trader can place the trade on the same day as the
pattern forms.
6. Risk-averse traders can place the trade on the next day after
ensuring that it obeys rule number 1, i.e. Buy strength, and Sell
weakness.
7. Abnormal candle lengths should not be traded.
1. Short candle indicates subdued activity.
2. Long candle indicates extreme activity; however, placing
stoploss becomes an issue.

The Spinning Top

•A spinning top has a small real body. The upper and lower
shadows are almost equal.
•The color does not matter. What matters is the open and close
prices are very close to each other.
•Spinning tops convey indecision in the market with both bulls and
bears being in equal control.
•Spinning top at the top end of the rally indicates that either the
bulls are pausing before they can resume the uptrend further or the
bears are preparing to break the trend.
•Spinning top at the bottom end of the rally indicates that either the
bears are pausing before they can resume the downtrend further or
the bulls are preparing to break the trend and take the markets
higher.

EXAMPLE

EXAMPLE

EXAMPLE

The Dojis

• Doji’s are very similar to spinning tops. Doji also conveys indecision in the
market. By definition, dojis do not have a real body. However, in reality,
even if a wafer-thin body appears, it is acceptable.
• A trader’s stance based on dojis is similar to the stance taken when a spinning
top occurs.

EXAMPLE

EXAMPLE

Paper Umbrella
HAMMER/HANGING MAN INVERTED HAMMER/SHOOTING STAR

Paper Umbrella

• A paper umbrella has a long lower shadow and a small real body. In the case of
the paper umbrella, the lower shadow should be at least twice the real body’s
length.
• Since the open and close prices are close to each other, the paper umbrella’s
color should not matter.
• If a paper umbrella appears at the bottom of a downtrend, it is called the
‘hammer.’
• If the paper umbrella appears at the top end of an uptrend, it is called the
hanging man.
• The hammer is a bullish pattern, and one should look at buying opportunities
when it appears.
• The low of the hammer acts as the stop-loss price trade.
• The hanging man is a bearish pattern which appears at the top end of the trend,
and one should look at selling opportunities when it appears.
• The high of the hanging man acts as the stop loss price for the trade.
• The shooting star is a bearish pattern which appears at the top end of the trend.
One should look at shorting opportunities when a shooting star appears.
• The high of the shooting star will be the stop loss price for the trade.

Bullish Beaoisb
↓
☆
Shootingstar
.
☆
Hammer
>
ostangingman
÷
Tricia

stammer eschotingllar
H H
◦
☐
UH
-
UH
-
0
0
•
,
°
.→wt
.
•
CIL 4L
'☐
-
Body
.
1,1%
2-
@
✗
(
Body
)

(continuation]Bullish Bearish
immer¥
shootingthan
I
-
f-
toong
-
i
l
'
'
i.
•
i
'
"
-
fleniiliy
.
-
☐
'
1
,
-
Prior
Txnd
.
-
,,
,
,
'
"'
!"
,
[Bearish
.
[Bullish
) "
Reveosd-CU.tn) Revered
i

Bullish Bearish
.
___
↓Éen H-anginymar.DE
'
.
H
1
'
'
"÷
.
:É
"
"
""
ii.
11
,

Hammer
ShootingIdar
Inu
.
Hammers
.
Hanging
man
.IMP
IMIG
-
\
i
'
-1"
"
"
"
i"
'
"
'
i
'
i
,
ii
"
i
""
l
,i
i
:
i
,
-
Strong
-
Phong
-
Weak
-
Weak

TECHNICAL
ANALYSIS
CANDLESTICK PATTERNS

PART - II

Single
Candlestick
Pattern

Multiple
Candlestick
Patterns

Candlestick Pattern Assumptions

The Marubozu

1. Remember the rules based on which candlesticks work.
2. Marubozu is the only pattern which violates rule number 3, i.e.
Look for the prior trend.
3. A bullish marubozu indicates bullishness.
1. Buy around the closing price of a bullish marubozu
2. Keep the low of the marubozu as the stoploss
4. A bearish marubozu indicates bearishness.
1. Sell around the closing price of a bearish marubozu
2. Keep the high of the marubozu as the stoploss
5. An aggressive trader can place the trade on the same day as the
pattern forms.
6. Risk-averse traders can place the trade on the next day after
ensuring that it obeys rule number 1, i.e. Buy strength, and Sell
weakness.
7. Abnormal candle lengths should not be traded.
1. Short candle indicates subdued activity.
2. Long candle indicates extreme activity; however, placing
stoploss becomes an issue.

The Spinning Top

•A spinning top has a small real body. The upper and lower
shadows are almost equal.
•The color does not matter. What matters is the open and close
prices are very close to each other.
•Spinning tops convey indecision in the market with both bulls and
bears being in equal control.
•Spinning top at the top end of the rally indicates that either the
bulls are pausing before they can resume the uptrend further or the
bears are preparing to break the trend.
•Spinning top at the bottom end of the rally indicates that either the
bears are pausing before they can resume the downtrend further or
the bulls are preparing to break the trend and take the markets
higher.

EXAMPLE

EXAMPLE

EXAMPLE

The Dojis

• Doji’s are very similar to spinning tops. Doji also conveys indecision in the
market. By definition, dojis do not have a real body. However, in reality,
even if a wafer-thin body appears, it is acceptable.
• A trader’s stance based on dojis is similar to the stance taken when a spinning
top occurs.

EXAMPLE

EXAMPLE

Paper Umbrella
HAMMER/HANGING MAN INVERTED HAMMER/SHOOTING STAR

Paper Umbrella

• A paper umbrella has a long lower shadow and a small real body. In the case of
the paper umbrella, the lower shadow should be at least twice the real body’s
length.
• Since the open and close prices are close to each other, the paper umbrella’s
color should not matter.
• If a paper umbrella appears at the bottom of a downtrend, it is called the
‘hammer.’
• If the paper umbrella appears at the top end of an uptrend, it is called the
hanging man.
• The hammer is a bullish pattern, and one should look at buying opportunities
when it appears.
• The low of the hammer acts as the stop-loss price trade.
• The hanging man is a bearish pattern which appears at the top end of the trend,
and one should look at selling opportunities when it appears.
• The high of the hanging man acts as the stop loss price for the trade.
• The shooting star is a bearish pattern which appears at the top end of the trend.
One should look at shorting opportunities when a shooting star appears.
• The high of the shooting star will be the stop loss price for the trade.

TECHNICAL
ANALYSIS
CANDLESTICK PATTERNS

PART - II

Single
Candlestick
Pattern

Multiple
Candlestick
Patterns

Candlestick Pattern Assumptions

The Marubozu

1. Remember the rules based on which candlesticks work.
2. Marubozu is the only pattern which violates rule number 3, i.e.
Look for the prior trend.
3. A bullish marubozu indicates bullishness.
1. Buy around the closing price of a bullish marubozu
2. Keep the low of the marubozu as the stoploss
4. A bearish marubozu indicates bearishness.
1. Sell around the closing price of a bearish marubozu
2. Keep the high of the marubozu as the stoploss
5. An aggressive trader can place the trade on the same day as the
pattern forms.
6. Risk-averse traders can place the trade on the next day after
ensuring that it obeys rule number 1, i.e. Buy strength, and Sell
weakness.
7. Abnormal candle lengths should not be traded.
1. Short candle indicates subdued activity.
2. Long candle indicates extreme activity; however, placing
stoploss becomes an issue.

The Spinning Top

•A spinning top has a small real body. The upper and lower
shadows are almost equal.
•The color does not matter. What matters is the open and close
prices are very close to each other.
•Spinning tops convey indecision in the market with both bulls and
bears being in equal control.
•Spinning top at the top end of the rally indicates that either the
bulls are pausing before they can resume the uptrend further or the
bears are preparing to break the trend.
•Spinning top at the bottom end of the rally indicates that either the
bears are pausing before they can resume the downtrend further or
the bulls are preparing to break the trend and take the markets
higher.

EXAMPLE

EXAMPLE

EXAMPLE

The Dojis

• Doji’s are very similar to spinning tops. Doji also conveys indecision in the
market. By definition, dojis do not have a real body. However, in reality,
even if a wafer-thin body appears, it is acceptable.
• A trader’s stance based on dojis is similar to the stance taken when a spinning
top occurs.

EXAMPLE

EXAMPLE

Paper Umbrella
HAMMER/HANGING MAN INVERTED HAMMER/SHOOTING STAR

Paper Umbrella

• A paper umbrella has a long lower shadow and a small real body. In the case of
the paper umbrella, the lower shadow should be at least twice the real body’s
length.
• Since the open and close prices are close to each other, the paper umbrella’s
color should not matter.
• If a paper umbrella appears at the bottom of a downtrend, it is called the
‘hammer.’
• If the paper umbrella appears at the top end of an uptrend, it is called the
hanging man.
• The hammer is a bullish pattern, and one should look at buying opportunities
when it appears.
• The low of the hammer acts as the stop-loss price trade.
• The hanging man is a bearish pattern which appears at the top end of the trend,
and one should look at selling opportunities when it appears.
• The high of the hanging man acts as the stop loss price for the trade.
• The shooting star is a bearish pattern which appears at the top end of the trend.
One should look at shorting opportunities when a shooting star appears.
• The high of the shooting star will be the stop loss price for the trade.

H

TECHNICAL
ANALYSIS
CANDLESTICK PATTERNS

PART - II

Single
Candlestick
Pattern

Multiple
Candlestick
Patterns

Candlestick Pattern Assumptions

The Marubozu

1. Remember the rules based on which candlesticks work.
2. Marubozu is the only pattern which violates rule number 3, i.e.
Look for the prior trend.
3. A bullish marubozu indicates bullishness.
1. Buy around the closing price of a bullish marubozu
2. Keep the low of the marubozu as the stoploss
4. A bearish marubozu indicates bearishness.
1. Sell around the closing price of a bearish marubozu
2. Keep the high of the marubozu as the stoploss
5. An aggressive trader can place the trade on the same day as the
pattern forms.
6. Risk-averse traders can place the trade on the next day after
ensuring that it obeys rule number 1, i.e. Buy strength, and Sell
weakness.
7. Abnormal candle lengths should not be traded.
1. Short candle indicates subdued activity.
2. Long candle indicates extreme activity; however, placing
stoploss becomes an issue.

The Spinning Top

•A spinning top has a small real body. The upper and lower
shadows are almost equal.
•The color does not matter. What matters is the open and close
prices are very close to each other.
•Spinning tops convey indecision in the market with both bulls and
bears being in equal control.
•Spinning top at the top end of the rally indicates that either the
bulls are pausing before they can resume the uptrend further or the
bears are preparing to break the trend.
•Spinning top at the bottom end of the rally indicates that either the
bears are pausing before they can resume the downtrend further or
the bulls are preparing to break the trend and take the markets
higher.

EXAMPLE

EXAMPLE

EXAMPLE

The Dojis

• Doji’s are very similar to spinning tops. Doji also conveys indecision in the
market. By definition, dojis do not have a real body. However, in reality,
even if a wafer-thin body appears, it is acceptable.
• A trader’s stance based on dojis is similar to the stance taken when a spinning
top occurs.

EXAMPLE

EXAMPLE

Paper Umbrella
HAMMER/HANGING MAN INVERTED HAMMER/SHOOTING STAR

Paper Umbrella

• A paper umbrella has a long lower shadow and a small real body. In the case of
the paper umbrella, the lower shadow should be at least twice the real body’s
length.
• Since the open and close prices are close to each other, the paper umbrella’s
color should not matter.
• If a paper umbrella appears at the bottom of a downtrend, it is called the
‘hammer.’
• If the paper umbrella appears at the top end of an uptrend, it is called the
hanging man.
• The hammer is a bullish pattern, and one should look at buying opportunities
when it appears.
• The low of the hammer acts as the stop-loss price trade.
• The hanging man is a bearish pattern which appears at the top end of the trend,
and one should look at selling opportunities when it appears.
• The high of the hanging man acts as the stop loss price for the trade.
• The shooting star is a bearish pattern which appears at the top end of the trend.
One should look at shorting opportunities when a shooting star appears.
• The high of the shooting star will be the stop loss price for the trade.

Engulfing Pattern
Bullish Engulfing Bearish Engulfing

Engulfing Pattern

1. To begin with, the bulls are in absolute control, pushing the
prices higher.
2. On P1, as expected, the market moves up and makes a new
high, reconfirming a bullish trend in the market.
3. On P2, as expected, the market opens higher and attempts to
make a new high. However, at this high point, selling pressure
starts. This selling comes unexpected and hence tends to
displace the bulls.
4. The sellers push the prices lower, so much so that the stock
closes below the previous day’s (P1) open. This creates
nervousness amongst the bulls.
5. The strong sell on P2 indicates that the bears may have
successfully broken down the bull’s stronghold and the market
may continue to witness selling pressure over the next few
days.
6. The idea is to short the index or the stock to capitalize on the
expected downward slide in prices.

Candlestick Pattern
Piercing Dark Cloud Cover

Piercing
Pattern/ Dark
Cloud Cover

Harami Pattern
Bullish Harami Bearish Harami

Harami Pattern

O
-
H
V
"
-L

Engulfing Pattern
Bullish Engulfing Bearish Engulfing

Engulfing Pattern

1. To begin with, the bulls are in absolute control, pushing the
prices higher.
2. On P1, as expected, the market moves up and makes a new
high, reconfirming a bullish trend in the market.
3. On P2, as expected, the market opens higher and attempts to
make a new high. However, at this high point, selling pressure
starts. This selling comes unexpected and hence tends to
displace the bulls.
4. The sellers push the prices lower, so much so that the stock
closes below the previous day’s (P1) open. This creates
nervousness amongst the bulls.
5. The strong sell on P2 indicates that the bears may have
successfully broken down the bull’s stronghold and the market
may continue to witness selling pressure over the next few
days.
6. The idea is to short the index or the stock to capitalize on the
expected downward slide in prices.

Candlestick Pattern
Piercing Dark Cloud Cover

Piercing
Pattern/ Dark
Cloud Cover

Harami Pattern
Bullish Harami Bearish Harami

Harami Pattern

50%
2/
-
G
Reh
-
25-30%
{
80%
-
80%
psyoohdy
,

Engulfing Pattern
Bullish Engulfing Bearish Engulfing

Engulfing Pattern

1. To begin with, the bulls are in absolute control, pushing the
prices higher.
2. On P1, as expected, the market moves up and makes a new
high, reconfirming a bullish trend in the market.
3. On P2, as expected, the market opens higher and attempts to
make a new high. However, at this high point, selling pressure
starts. This selling comes unexpected and hence tends to
displace the bulls.
4. The sellers push the prices lower, so much so that the stock
closes below the previous day’s (P1) open. This creates
nervousness amongst the bulls.
5. The strong sell on P2 indicates that the bears may have
successfully broken down the bull’s stronghold and the market
may continue to witness selling pressure over the next few
days.
6. The idea is to short the index or the stock to capitalize on the
expected downward slide in prices.

Candlestick Pattern
Piercing Dark Cloud Cover

Piercing
Pattern/ Dark
Cloud Cover

Harami Pattern
Bullish Harami Bearish Harami

Harami Pattern

"
.
.
Eng
H
Hidden
.
BA
-
',
,
Butts
-
80%
↑
'
.
×i.
÷¥-*¥÷•÷' <z

Engulfing Pattern
Bullish Engulfing Bearish Engulfing

Engulfing Pattern

1. To begin with, the bulls are in absolute control, pushing the
prices higher.
2. On P1, as expected, the market moves up and makes a new
high, reconfirming a bullish trend in the market.
3. On P2, as expected, the market opens higher and attempts to
make a new high. However, at this high point, selling pressure
starts. This selling comes unexpected and hence tends to
displace the bulls.
4. The sellers push the prices lower, so much so that the stock
closes below the previous day’s (P1) open. This creates
nervousness amongst the bulls.
5. The strong sell on P2 indicates that the bears may have
successfully broken down the bull’s stronghold and the market
may continue to witness selling pressure over the next few
days.
6. The idea is to short the index or the stock to capitalize on the
expected downward slide in prices.

Candlestick Pattern
Piercing Dark Cloud Cover

Piercing
Pattern/ Dark
Cloud Cover

Harami Pattern
Bullish Harami Bearish Harami

Harami Pattern

Engulfing
-
l-Beaoi.sn
Bullish
\
-
Strong
-
me
.
-
°
"
i"
"
_
flexibility
-
\
*
¥111
-
c
-
c
"¥
\
1-
o.gs
,
,
,
)
"
"
"
11
,
,
I

Engulfing Pattern
Bullish Engulfing Bearish Engulfing

Engulfing Pattern

1. To begin with, the bulls are in absolute control, pushing the
prices higher.
2. On P1, as expected, the market moves up and makes a new
high, reconfirming a bullish trend in the market.
3. On P2, as expected, the market opens higher and attempts to
make a new high. However, at this high point, selling pressure
starts. This selling comes unexpected and hence tends to
displace the bulls.
4. The sellers push the prices lower, so much so that the stock
closes below the previous day’s (P1) open. This creates
nervousness amongst the bulls.
5. The strong sell on P2 indicates that the bears may have
successfully broken down the bull’s stronghold and the market
may continue to witness selling pressure over the next few
days.
6. The idea is to short the index or the stock to capitalize on the
expected downward slide in prices.

Candlestick Pattern
Piercing Dark Cloud Cover

Piercing
Pattern/ Dark
Cloud Cover

Harami Pattern
Bullish Harami Bearish Harami

Harami Pattern

Engulfing Pattern
Bullish Engulfing Bearish Engulfing

Engulfing Pattern

1. To begin with, the bulls are in absolute control, pushing the
prices higher.
2. On P1, as expected, the market moves up and makes a new
high, reconfirming a bullish trend in the market.
3. On P2, as expected, the market opens higher and attempts to
make a new high. However, at this high point, selling pressure
starts. This selling comes unexpected and hence tends to
displace the bulls.
4. The sellers push the prices lower, so much so that the stock
closes below the previous day’s (P1) open. This creates
nervousness amongst the bulls.
5. The strong sell on P2 indicates that the bears may have
successfully broken down the bull’s stronghold and the market
may continue to witness selling pressure over the next few
days.
6. The idea is to short the index or the stock to capitalize on the
expected downward slide in prices.

Candlestick Pattern
Piercing Dark Cloud Cover

Piercing
Pattern/ Dark
Cloud Cover

Harami Pattern
Bullish Harami Bearish Harami

Harami Pattern

I
:#
v1

Engulfing Pattern
Bullish Engulfing Bearish Engulfing

Engulfing Pattern

1. To begin with, the bulls are in absolute control, pushing the
prices higher.
2. On P1, as expected, the market moves up and makes a new
high, reconfirming a bullish trend in the market.
3. On P2, as expected, the market opens higher and attempts to
make a new high. However, at this high point, selling pressure
starts. This selling comes unexpected and hence tends to
displace the bulls.
4. The sellers push the prices lower, so much so that the stock
closes below the previous day’s (P1) open. This creates
nervousness amongst the bulls.
5. The strong sell on P2 indicates that the bears may have
successfully broken down the bull’s stronghold and the market
may continue to witness selling pressure over the next few
days.
6. The idea is to short the index or the stock to capitalize on the
expected downward slide in prices.

Candlestick Pattern
Piercing Dark Cloud Cover

Piercing
Pattern/ Dark
Cloud Cover

Harami Pattern
Bullish Harami Bearish Harami

Harami Pattern

t.IE:8

Engulfing Pattern
Bullish Engulfing Bearish Engulfing

Engulfing Pattern

1. To begin with, the bulls are in absolute control, pushing the
prices higher.
2. On P1, as expected, the market moves up and makes a new
high, reconfirming a bullish trend in the market.
3. On P2, as expected, the market opens higher and attempts to
make a new high. However, at this high point, selling pressure
starts. This selling comes unexpected and hence tends to
displace the bulls.
4. The sellers push the prices lower, so much so that the stock
closes below the previous day’s (P1) open. This creates
nervousness amongst the bulls.
5. The strong sell on P2 indicates that the bears may have
successfully broken down the bull’s stronghold and the market
may continue to witness selling pressure over the next few
days.
6. The idea is to short the index or the stock to capitalize on the
expected downward slide in prices.

Candlestick Pattern
Piercing Dark Cloud Cover

Piercing
Pattern/ Dark
Cloud Cover

Harami Pattern
Bullish Harami Bearish Harami

Harami Pattern

÷1$
¥

Engulfing Pattern
Bullish Engulfing Bearish Engulfing

Engulfing Pattern

1. To begin with, the bulls are in absolute control, pushing the
prices higher.
2. On P1, as expected, the market moves up and makes a new
high, reconfirming a bullish trend in the market.
3. On P2, as expected, the market opens higher and attempts to
make a new high. However, at this high point, selling pressure
starts. This selling comes unexpected and hence tends to
displace the bulls.
4. The sellers push the prices lower, so much so that the stock
closes below the previous day’s (P1) open. This creates
nervousness amongst the bulls.
5. The strong sell on P2 indicates that the bears may have
successfully broken down the bull’s stronghold and the market
may continue to witness selling pressure over the next few
days.
6. The idea is to short the index or the stock to capitalize on the
expected downward slide in prices.

Candlestick Pattern
Piercing Dark Cloud Cover

Piercing
Pattern/ Dark
Cloud Cover

Harami Pattern
Bullish Harami Bearish Harami

Harami Pattern

"
"
'
Puy
.

Engulfing Pattern
Bullish Engulfing Bearish Engulfing

Engulfing Pattern

1. To begin with, the bulls are in absolute control, pushing the
prices higher.
2. On P1, as expected, the market moves up and makes a new
high, reconfirming a bullish trend in the market.
3. On P2, as expected, the market opens higher and attempts to
make a new high. However, at this high point, selling pressure
starts. This selling comes unexpected and hence tends to
displace the bulls.
4. The sellers push the prices lower, so much so that the stock
closes below the previous day’s (P1) open. This creates
nervousness amongst the bulls.
5. The strong sell on P2 indicates that the bears may have
successfully broken down the bull’s stronghold and the market
may continue to witness selling pressure over the next few
days.
6. The idea is to short the index or the stock to capitalize on the
expected downward slide in prices.

Candlestick Pattern
Piercing Dark Cloud Cover

Piercing
Pattern/ Dark
Cloud Cover

Harami Pattern
Bullish Harami Bearish Harami

Harami Pattern

freak
i
'II
☐
HttpI¥!
'
'
;

Piercing
_
that
=
DarkCloud
-
flexibility
.
cover
.
Bearish
a
Bullish
i
-
i
.☒qh•••
:{
I
iMk_B÷i
,
i
_
-
.
*
*
'
÷
.
.
!
:&
in
.
" "
"
i.
I
1
Tj
:
•
1
,
◦
got
/
÷
,
" i
÷g4
t.li
'
i

Engulfing Pattern
Bullish Engulfing Bearish Engulfing

Engulfing Pattern

1. To begin with, the bulls are in absolute control, pushing the
prices higher.
2. On P1, as expected, the market moves up and makes a new
high, reconfirming a bullish trend in the market.
3. On P2, as expected, the market opens higher and attempts to
make a new high. However, at this high point, selling pressure
starts. This selling comes unexpected and hence tends to
displace the bulls.
4. The sellers push the prices lower, so much so that the stock
closes below the previous day’s (P1) open. This creates
nervousness amongst the bulls.
5. The strong sell on P2 indicates that the bears may have
successfully broken down the bull’s stronghold and the market
may continue to witness selling pressure over the next few
days.
6. The idea is to short the index or the stock to capitalize on the
expected downward slide in prices.

Candlestick Pattern
Piercing Dark Cloud Cover

Piercing
Pattern/ Dark
Cloud Cover

Harami Pattern
Bullish Harami Bearish Harami

Harami Pattern

Engulfing Pattern
Bullish Engulfing Bearish Engulfing

Engulfing Pattern

1. To begin with, the bulls are in absolute control, pushing the
prices higher.
2. On P1, as expected, the market moves up and makes a new
high, reconfirming a bullish trend in the market.
3. On P2, as expected, the market opens higher and attempts to
make a new high. However, at this high point, selling pressure
starts. This selling comes unexpected and hence tends to
displace the bulls.
4. The sellers push the prices lower, so much so that the stock
closes below the previous day’s (P1) open. This creates
nervousness amongst the bulls.
5. The strong sell on P2 indicates that the bears may have
successfully broken down the bull’s stronghold and the market
may continue to witness selling pressure over the next few
days.
6. The idea is to short the index or the stock to capitalize on the
expected downward slide in prices.

Candlestick Pattern
Piercing Dark Cloud Cover

Piercing
Pattern/ Dark
Cloud Cover

Harami Pattern
Bullish Harami Bearish Harami

Harami Pattern

i
&
•
s g-
Reread
18
it
,

Engulfing Pattern
Bullish Engulfing Bearish Engulfing

Engulfing Pattern

1. To begin with, the bulls are in absolute control, pushing the
prices higher.
2. On P1, as expected, the market moves up and makes a new
high, reconfirming a bullish trend in the market.
3. On P2, as expected, the market opens higher and attempts to
make a new high. However, at this high point, selling pressure
starts. This selling comes unexpected and hence tends to
displace the bulls.
4. The sellers push the prices lower, so much so that the stock
closes below the previous day’s (P1) open. This creates
nervousness amongst the bulls.
5. The strong sell on P2 indicates that the bears may have
successfully broken down the bull’s stronghold and the market
may continue to witness selling pressure over the next few
days.
6. The idea is to short the index or the stock to capitalize on the
expected downward slide in prices.

Candlestick Pattern
Piercing Dark Cloud Cover

Piercing
Pattern/ Dark
Cloud Cover

Harami Pattern
Bullish Harami Bearish Harami

Harami Pattern

i
-
Domination
.
×
NO
8
'
•
:
/
Ii:#
-
.
/
i¥-
I
<{i±_
19Wwolf

Engulfing Pattern
Bullish Engulfing Bearish Engulfing

Engulfing Pattern

1. To begin with, the bulls are in absolute control, pushing the
prices higher.
2. On P1, as expected, the market moves up and makes a new
high, reconfirming a bullish trend in the market.
3. On P2, as expected, the market opens higher and attempts to
make a new high. However, at this high point, selling pressure
starts. This selling comes unexpected and hence tends to
displace the bulls.
4. The sellers push the prices lower, so much so that the stock
closes below the previous day’s (P1) open. This creates
nervousness amongst the bulls.
5. The strong sell on P2 indicates that the bears may have
successfully broken down the bull’s stronghold and the market
may continue to witness selling pressure over the next few
days.
6. The idea is to short the index or the stock to capitalize on the
expected downward slide in prices.

Candlestick Pattern
Piercing Dark Cloud Cover

Piercing
Pattern/ Dark
Cloud Cover

Harami Pattern
Bullish Harami Bearish Harami

Harami Pattern

-
Ak

"
Jewish Hasani
.
- -
Bearishdeandle
I
-
i
"
" outside
candles
'
"
"
Ily
y
'
too
.
◦ c
!to
Do
¥98
.C.
1
,
I
1°
-
95
•
01IC
i
'
_
I15 ••É_
'
'
←F
,
,
'B.;_
-
Sen
,
"
\
,

-
-
-
flexibility
.
-
'
o
:*
,¥÷¥1¥±¥¥:

Engulfing Pattern
Bullish Engulfing Bearish Engulfing

Engulfing Pattern

1. To begin with, the bulls are in absolute control, pushing the
prices higher.
2. On P1, as expected, the market moves up and makes a new
high, reconfirming a bullish trend in the market.
3. On P2, as expected, the market opens higher and attempts to
make a new high. However, at this high point, selling pressure
starts. This selling comes unexpected and hence tends to
displace the bulls.
4. The sellers push the prices lower, so much so that the stock
closes below the previous day’s (P1) open. This creates
nervousness amongst the bulls.
5. The strong sell on P2 indicates that the bears may have
successfully broken down the bull’s stronghold and the market
may continue to witness selling pressure over the next few
days.
6. The idea is to short the index or the stock to capitalize on the
expected downward slide in prices.

Candlestick Pattern
Piercing Dark Cloud Cover

Piercing
Pattern/ Dark
Cloud Cover

Harami Pattern
Bullish Harami Bearish Harami

Harami Pattern

Engulfing Pattern
Bullish Engulfing Bearish Engulfing

Engulfing Pattern

1. To begin with, the bulls are in absolute control, pushing the
prices higher.
2. On P1, as expected, the market moves up and makes a new
high, reconfirming a bullish trend in the market.
3. On P2, as expected, the market opens higher and attempts to
make a new high. However, at this high point, selling pressure
starts. This selling comes unexpected and hence tends to
displace the bulls.
4. The sellers push the prices lower, so much so that the stock
closes below the previous day’s (P1) open. This creates
nervousness amongst the bulls.
5. The strong sell on P2 indicates that the bears may have
successfully broken down the bull’s stronghold and the market
may continue to witness selling pressure over the next few
days.
6. The idea is to short the index or the stock to capitalize on the
expected downward slide in prices.

Candlestick Pattern
Piercing Dark Cloud Cover

Piercing
Pattern/ Dark
Cloud Cover

Harami Pattern
Bullish Harami Bearish Harami

Harami Pattern

Fay
"
'
"

Engulfing Pattern
Bullish Engulfing Bearish Engulfing

Engulfing Pattern

1. To begin with, the bulls are in absolute control, pushing the
prices higher.
2. On P1, as expected, the market moves up and makes a new
high, reconfirming a bullish trend in the market.
3. On P2, as expected, the market opens higher and attempts to
make a new high. However, at this high point, selling pressure
starts. This selling comes unexpected and hence tends to
displace the bulls.
4. The sellers push the prices lower, so much so that the stock
closes below the previous day’s (P1) open. This creates
nervousness amongst the bulls.
5. The strong sell on P2 indicates that the bears may have
successfully broken down the bull’s stronghold and the market
may continue to witness selling pressure over the next few
days.
6. The idea is to short the index or the stock to capitalize on the
expected downward slide in prices.

Candlestick Pattern
Piercing Dark Cloud Cover

Piercing
Pattern/ Dark
Cloud Cover

Harami Pattern
Bullish Harami Bearish Harami

Harami Pattern

'
.
<{<{*

Engulfing Pattern
Bullish Engulfing Bearish Engulfing

Engulfing Pattern

1. To begin with, the bulls are in absolute control, pushing the
prices higher.
2. On P1, as expected, the market moves up and makes a new
high, reconfirming a bullish trend in the market.
3. On P2, as expected, the market opens higher and attempts to
make a new high. However, at this high point, selling pressure
starts. This selling comes unexpected and hence tends to
displace the bulls.
4. The sellers push the prices lower, so much so that the stock
closes below the previous day’s (P1) open. This creates
nervousness amongst the bulls.
5. The strong sell on P2 indicates that the bears may have
successfully broken down the bull’s stronghold and the market
may continue to witness selling pressure over the next few
days.
6. The idea is to short the index or the stock to capitalize on the
expected downward slide in prices.

Candlestick Pattern
Piercing Dark Cloud Cover

Piercing
Pattern/ Dark
Cloud Cover

Harami Pattern
Bullish Harami Bearish Harami

Harami Pattern

Star Pattern
Morning Star Evening Star

Star Pattern

Support & Resistance

Support & Resistance

Steps to draw S&R
level

1. Load Data Points – If the objective is to identify short term
S&R load at least 3-6M. of data points and for long term S&R, load
at least 12–18M. of data points.
● Long term S&R – is useful for swing trading.
● Short term S&R – is useful intraday and BTST trades.

Steps to draw S&R
level

2. Identify at least 3 price action zones –
•Hesitated to move up/down further after a brief up/down
move.
•Sharp reversals at a particular price point.

Steps to draw S&R
level

3.Align the price action zones – When you look at a 12-month
chart, it is common to spot many price action zones. But the trick
is to identify at least 3 price action zones at the same price level.

Steps to draw S&R
level

4. Fit a horizontal line – Connect the three price action zones
with a horizontal line. Based on where this line fits in concerning
the current market price, it either becomes support or resistance.

Volume

Sr.
No.
Time
Buy
Qty.
Sell
Qty.
PriceVolume
Total
Volume
01
9:30
AM
400 400 62.20 400 400
02
10.30
AM
500 500 62.75 500 900
03
11:30
AM
350 350 63.10 350 1,250
04
12:30
PM
150 150 63.50 150 1,400
05
1:30
PM
625 625 63.75 625 2,025
06
2:30
PM
475 475 64.20 475 2,500
07
3:30
PM
800 800 64.50 800 3,300
1. Volume helps us to confirm trends
and patterns. Consider volumes as a
means to gain insights into how other
participants perceive the market.
2. Volumes indicate how many shares
are bought and sold over a given period
of time. The more active the share, the
higher would be its volume. For
example, you decide to buy 100 shares
of Amara Raja Batteries at 1000, and I
decide to sell 100 shares of Amara Raja
Batteries at 1000. There are a price and
quantity match, which results in a trade.
You and I together have created a
volume of 100 shares. Many people tend
to assume volume count as 200 (100
buys + 100 sells), which is not the right
way to look at volumes.

Volume trend table
•We can also compare today’s volume over the average of the last
10 day's volume. The thumb rule is as follows:
•High Vol. = Today’s vol. > last 10 days avg. Vol.
•Low Vol. = Today’s vol. < last 10 days avg. Vol.
•Average Vol. = Today’s vol. = last 10 days avg. vol.
Sr. No.PriceVolumeWhat is the expectation?
1 IncreasesIncreases Bullish
2 IncreasesDecreases Caution – weak hands buying
3 DecreasesIncreases Bearish
4 DecreasesDecreases Caution – weak hands selling
The thought process behind the
volume trend table
1. Why is the price increasing?
➢ Because market participants are buying.
2. Are there any institutions buying with the price
increase?
➢ Not likely.
3. How would you know that there is no
meaningful purchase by institutional investors?
➢ Simple, if they were buying, then the
volumes would have increased and not
decrease.
4. So what does a price increase indicate by
decrease in volumes ?
➢ It means the price is increasing because of
small retailers and not really heavy buying.
Hence it could be a possible bull trap.
1. Why is the price decreasing?
➢ Because market participants are selling.
2. Are there any institutions selling with the price
decrease?
➢ Not likely
3. How would you know that there are no
meaningful sell orders by institutional investors?
➢ Simple, if they were selling, then the
volume would increase and not decrease.
4. So how would you interpret a decline in price
and a decline in volume?
➢ It means the price decreases because of
small retailers, and not really heavy selling.
It could be a possible bear trap.

star
.Morning(
Bullish
-
_
(
Bear
?Evening
-'
'
'y
.
1.
i
"
"
.
1W
•
I
-
iii.t.ii.it
^
,,
,
'
'
"
'
I
•
1
I
'i.

Star Pattern
Morning Star Evening Star

Star Pattern

Support & Resistance

Support & Resistance

Steps to draw S&R
level

1. Load Data Points – If the objective is to identify short term
S&R load at least 3-6M. of data points and for long term S&R, load
at least 12–18M. of data points.
● Long term S&R – is useful for swing trading.
● Short term S&R – is useful intraday and BTST trades.

Steps to draw S&R
level

2. Identify at least 3 price action zones –
•Hesitated to move up/down further after a brief up/down
move.
•Sharp reversals at a particular price point.

Steps to draw S&R
level

3.Align the price action zones – When you look at a 12-month
chart, it is common to spot many price action zones. But the trick
is to identify at least 3 price action zones at the same price level.

Steps to draw S&R
level

4. Fit a horizontal line – Connect the three price action zones
with a horizontal line. Based on where this line fits in concerning
the current market price, it either becomes support or resistance.

Volume

Sr.
No.
Time
Buy
Qty.
Sell
Qty.
PriceVolume
Total
Volume
01
9:30
AM
400 400 62.20 400 400
02
10.30
AM
500 500 62.75 500 900
03
11:30
AM
350 350 63.10 350 1,250
04
12:30
PM
150 150 63.50 150 1,400
05
1:30
PM
625 625 63.75 625 2,025
06
2:30
PM
475 475 64.20 475 2,500
07
3:30
PM
800 800 64.50 800 3,300
1. Volume helps us to confirm trends
and patterns. Consider volumes as a
means to gain insights into how other
participants perceive the market.
2. Volumes indicate how many shares
are bought and sold over a given period
of time. The more active the share, the
higher would be its volume. For
example, you decide to buy 100 shares
of Amara Raja Batteries at 1000, and I
decide to sell 100 shares of Amara Raja
Batteries at 1000. There are a price and
quantity match, which results in a trade.
You and I together have created a
volume of 100 shares. Many people tend
to assume volume count as 200 (100
buys + 100 sells), which is not the right
way to look at volumes.

Volume trend table
•We can also compare today’s volume over the average of the last
10 day's volume. The thumb rule is as follows:
•High Vol. = Today’s vol. > last 10 days avg. Vol.
•Low Vol. = Today’s vol. < last 10 days avg. Vol.
•Average Vol. = Today’s vol. = last 10 days avg. vol.
Sr. No.PriceVolumeWhat is the expectation?
1 IncreasesIncreases Bullish
2 IncreasesDecreases Caution – weak hands buying
3 DecreasesIncreases Bearish
4 DecreasesDecreases Caution – weak hands selling
The thought process behind the
volume trend table
1. Why is the price increasing?
➢ Because market participants are buying.
2. Are there any institutions buying with the price
increase?
➢ Not likely.
3. How would you know that there is no
meaningful purchase by institutional investors?
➢ Simple, if they were buying, then the
volumes would have increased and not
decrease.
4. So what does a price increase indicate by
decrease in volumes ?
➢ It means the price is increasing because of
small retailers and not really heavy buying.
Hence it could be a possible bull trap.
1. Why is the price decreasing?
➢ Because market participants are selling.
2. Are there any institutions selling with the price
decrease?
➢ Not likely
3. How would you know that there are no
meaningful sell orders by institutional investors?
➢ Simple, if they were selling, then the
volume would increase and not decrease.
4. So how would you interpret a decline in price
and a decline in volume?
➢ It means the price decreases because of
small retailers, and not really heavy selling.
It could be a possible bear trap.

-
strong
-
-
-
☐
HID
.*if

Star Pattern
Morning Star Evening Star

Star Pattern

Support & Resistance

Support & Resistance

Steps to draw S&R
level

1. Load Data Points – If the objective is to identify short term
S&R load at least 3-6M. of data points and for long term S&R, load
at least 12–18M. of data points.
● Long term S&R – is useful for swing trading.
● Short term S&R – is useful intraday and BTST trades.

Steps to draw S&R
level

2. Identify at least 3 price action zones –
•Hesitated to move up/down further after a brief up/down
move.
•Sharp reversals at a particular price point.

Steps to draw S&R
level

3.Align the price action zones – When you look at a 12-month
chart, it is common to spot many price action zones. But the trick
is to identify at least 3 price action zones at the same price level.

Steps to draw S&R
level

4. Fit a horizontal line – Connect the three price action zones
with a horizontal line. Based on where this line fits in concerning
the current market price, it either becomes support or resistance.

Volume

Sr.
No.
Time
Buy
Qty.
Sell
Qty.
PriceVolume
Total
Volume
01
9:30
AM
400 400 62.20 400 400
02
10.30
AM
500 500 62.75 500 900
03
11:30
AM
350 350 63.10 350 1,250
04
12:30
PM
150 150 63.50 150 1,400
05
1:30
PM
625 625 63.75 625 2,025
06
2:30
PM
475 475 64.20 475 2,500
07
3:30
PM
800 800 64.50 800 3,300
1. Volume helps us to confirm trends
and patterns. Consider volumes as a
means to gain insights into how other
participants perceive the market.
2. Volumes indicate how many shares
are bought and sold over a given period
of time. The more active the share, the
higher would be its volume. For
example, you decide to buy 100 shares
of Amara Raja Batteries at 1000, and I
decide to sell 100 shares of Amara Raja
Batteries at 1000. There are a price and
quantity match, which results in a trade.
You and I together have created a
volume of 100 shares. Many people tend
to assume volume count as 200 (100
buys + 100 sells), which is not the right
way to look at volumes.

Volume trend table
•We can also compare today’s volume over the average of the last
10 day's volume. The thumb rule is as follows:
•High Vol. = Today’s vol. > last 10 days avg. Vol.
•Low Vol. = Today’s vol. < last 10 days avg. Vol.
•Average Vol. = Today’s vol. = last 10 days avg. vol.
Sr. No.PriceVolumeWhat is the expectation?
1 IncreasesIncreases Bullish
2 IncreasesDecreases Caution – weak hands buying
3 DecreasesIncreases Bearish
4 DecreasesDecreases Caution – weak hands selling
The thought process behind the
volume trend table
1. Why is the price increasing?
➢ Because market participants are buying.
2. Are there any institutions buying with the price
increase?
➢ Not likely.
3. How would you know that there is no
meaningful purchase by institutional investors?
➢ Simple, if they were buying, then the
volumes would have increased and not
decrease.
4. So what does a price increase indicate by
decrease in volumes ?
➢ It means the price is increasing because of
small retailers and not really heavy buying.
Hence it could be a possible bull trap.
1. Why is the price decreasing?
➢ Because market participants are selling.
2. Are there any institutions selling with the price
decrease?
➢ Not likely
3. How would you know that there are no
meaningful sell orders by institutional investors?
➢ Simple, if they were selling, then the
volume would increase and not decrease.
4. So how would you interpret a decline in price
and a decline in volume?
➢ It means the price decreases because of
small retailers, and not really heavy selling.
It could be a possible bear trap.
f.
.
_

Star Pattern
Morning Star Evening Star

Star Pattern

Support & Resistance

Support & Resistance

Steps to draw S&R
level

1. Load Data Points – If the objective is to identify short term
S&R load at least 3-6M. of data points and for long term S&R, load
at least 12–18M. of data points.
● Long term S&R – is useful for swing trading.
● Short term S&R – is useful intraday and BTST trades.

Steps to draw S&R
level

2. Identify at least 3 price action zones –
•Hesitated to move up/down further after a brief up/down
move.
•Sharp reversals at a particular price point.

Steps to draw S&R
level

3.Align the price action zones – When you look at a 12-month
chart, it is common to spot many price action zones. But the trick
is to identify at least 3 price action zones at the same price level.

Steps to draw S&R
level

4. Fit a horizontal line – Connect the three price action zones
with a horizontal line. Based on where this line fits in concerning
the current market price, it either becomes support or resistance.

Volume

Sr.
No.
Time
Buy
Qty.
Sell
Qty.
PriceVolume
Total
Volume
01
9:30
AM
400 400 62.20 400 400
02
10.30
AM
500 500 62.75 500 900
03
11:30
AM
350 350 63.10 350 1,250
04
12:30
PM
150 150 63.50 150 1,400
05
1:30
PM
625 625 63.75 625 2,025
06
2:30
PM
475 475 64.20 475 2,500
07
3:30
PM
800 800 64.50 800 3,300
1. Volume helps us to confirm trends
and patterns. Consider volumes as a
means to gain insights into how other
participants perceive the market.
2. Volumes indicate how many shares
are bought and sold over a given period
of time. The more active the share, the
higher would be its volume. For
example, you decide to buy 100 shares
of Amara Raja Batteries at 1000, and I
decide to sell 100 shares of Amara Raja
Batteries at 1000. There are a price and
quantity match, which results in a trade.
You and I together have created a
volume of 100 shares. Many people tend
to assume volume count as 200 (100
buys + 100 sells), which is not the right
way to look at volumes.

Volume trend table
•We can also compare today’s volume over the average of the last
10 day's volume. The thumb rule is as follows:
•High Vol. = Today’s vol. > last 10 days avg. Vol.
•Low Vol. = Today’s vol. < last 10 days avg. Vol.
•Average Vol. = Today’s vol. = last 10 days avg. vol.
Sr. No.PriceVolumeWhat is the expectation?
1 IncreasesIncreases Bullish
2 IncreasesDecreases Caution – weak hands buying
3 DecreasesIncreases Bearish
4 DecreasesDecreases Caution – weak hands selling
The thought process behind the
volume trend table
1. Why is the price increasing?
➢ Because market participants are buying.
2. Are there any institutions buying with the price
increase?
➢ Not likely.
3. How would you know that there is no
meaningful purchase by institutional investors?
➢ Simple, if they were buying, then the
volumes would have increased and not
decrease.
4. So what does a price increase indicate by
decrease in volumes ?
➢ It means the price is increasing because of
small retailers and not really heavy buying.
Hence it could be a possible bull trap.
1. Why is the price decreasing?
➢ Because market participants are selling.
2. Are there any institutions selling with the price
decrease?
➢ Not likely
3. How would you know that there are no
meaningful sell orders by institutional investors?
➢ Simple, if they were selling, then the
volume would increase and not decrease.
4. So how would you interpret a decline in price
and a decline in volume?
➢ It means the price decreases because of
small retailers, and not really heavy selling.
It could be a possible bear trap.
_

Star Pattern
Morning Star Evening Star

Star Pattern

Support & Resistance

Support & Resistance

Steps to draw S&R
level

1. Load Data Points – If the objective is to identify short term
S&R load at least 3-6M. of data points and for long term S&R, load
at least 12–18M. of data points.
● Long term S&R – is useful for swing trading.
● Short term S&R – is useful intraday and BTST trades.

Steps to draw S&R
level

2. Identify at least 3 price action zones –
•Hesitated to move up/down further after a brief up/down
move.
•Sharp reversals at a particular price point.

Steps to draw S&R
level

3.Align the price action zones – When you look at a 12-month
chart, it is common to spot many price action zones. But the trick
is to identify at least 3 price action zones at the same price level.

Steps to draw S&R
level

4. Fit a horizontal line – Connect the three price action zones
with a horizontal line. Based on where this line fits in concerning
the current market price, it either becomes support or resistance.

Volume

Sr.
No.
Time
Buy
Qty.
Sell
Qty.
PriceVolume
Total
Volume
01
9:30
AM
400 400 62.20 400 400
02
10.30
AM
500 500 62.75 500 900
03
11:30
AM
350 350 63.10 350 1,250
04
12:30
PM
150 150 63.50 150 1,400
05
1:30
PM
625 625 63.75 625 2,025
06
2:30
PM
475 475 64.20 475 2,500
07
3:30
PM
800 800 64.50 800 3,300
1. Volume helps us to confirm trends
and patterns. Consider volumes as a
means to gain insights into how other
participants perceive the market.
2. Volumes indicate how many shares
are bought and sold over a given period
of time. The more active the share, the
higher would be its volume. For
example, you decide to buy 100 shares
of Amara Raja Batteries at 1000, and I
decide to sell 100 shares of Amara Raja
Batteries at 1000. There are a price and
quantity match, which results in a trade.
You and I together have created a
volume of 100 shares. Many people tend
to assume volume count as 200 (100
buys + 100 sells), which is not the right
way to look at volumes.

Volume trend table
•We can also compare today’s volume over the average of the last
10 day's volume. The thumb rule is as follows:
•High Vol. = Today’s vol. > last 10 days avg. Vol.
•Low Vol. = Today’s vol. < last 10 days avg. Vol.
•Average Vol. = Today’s vol. = last 10 days avg. vol.
Sr. No.PriceVolumeWhat is the expectation?
1 IncreasesIncreases Bullish
2 IncreasesDecreases Caution – weak hands buying
3 DecreasesIncreases Bearish
4 DecreasesDecreases Caution – weak hands selling
The thought process behind the
volume trend table
1. Why is the price increasing?
➢ Because market participants are buying.
2. Are there any institutions buying with the price
increase?
➢ Not likely.
3. How would you know that there is no
meaningful purchase by institutional investors?
➢ Simple, if they were buying, then the
volumes would have increased and not
decrease.
4. So what does a price increase indicate by
decrease in volumes ?
➢ It means the price is increasing because of
small retailers and not really heavy buying.
Hence it could be a possible bull trap.
1. Why is the price decreasing?
➢ Because market participants are selling.
2. Are there any institutions selling with the price
decrease?
➢ Not likely
3. How would you know that there are no
meaningful sell orders by institutional investors?
➢ Simple, if they were selling, then the
volume would increase and not decrease.
4. So how would you interpret a decline in price
and a decline in volume?
➢ It means the price decreases because of
small retailers, and not really heavy selling.
It could be a possible bear trap.

TECHNICAL ANALYSIS PART II.pdf

About This Presentation

Slide Content

Tags

Categories

Download

Quick Actions

Statistics

Related Slideshows

TECHNICAL ANALYSIS PART II.pdf

About This Presentation

Slide Content

Slide 1

Slide 2

Slide 3

Slide 4

Slide 5

Slide 6

Slide 7

Slide 8

Slide 9

Slide 10

Slide 11

Slide 12

Slide 13

Slide 14

Slide 15

Slide 16

Slide 17

Slide 18

Slide 19

Slide 20

Slide 21

Slide 22

Slide 23

Slide 24

Slide 25

Slide 26

Slide 27

Slide 28

Slide 29

Slide 30

Slide 31

Slide 32

Slide 33

Slide 34

Slide 35

Slide 36

Slide 37

Slide 38

Slide 39

Slide 40

Slide 41

Slide 42

Slide 43

Slide 44

Slide 45

Slide 46

Slide 47

Slide 48

Slide 49

Slide 50

Slide 51

Slide 52

Slide 53

Slide 54

Slide 55

Slide 56

Slide 57

Slide 58

Slide 59

Slide 60

Slide 61

Slide 62

Slide 63

Slide 64

Slide 65

Slide 66

Tags

Categories

Download

Quick Actions

Statistics

Related Slideshows

Pray For The Peace Of Jerusalem and You Will Prosper

Don_t_Waste_Your_Life_God.....powerpoint

VILLASUR_FACTORS_TO_CONSIDER_IN_PLATING_SALAD_10-13.pdf

Fertility awareness methods for women in the society

Chapter 5 Arithmetic Functions Computer Organisation and Architecture