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Reversal Patterns

Piercing Line pattern

In a downtrend the market gaps open, but rallies strong to close above the previous days midpoint. This pattern suggests an opportunity for the bulls to enter the market and support the trend reversal. This pattern is the opposite of the Dark Cloud Cover.

• A long black body followed by a white body.
• The white body pierces the midpoint of the prior white body.
• This pattern occurs in a downtrend.

Note: Bullish trend and Moderate reliability

Three Black Crows pattern

In an uptrend three long black days occur with consecutively lower closes. Three Black Crows pattern suggests that the market has been at a high price for too long, and investors are beginning to compensate for it.

• Three black days occur, each with a close below the previous day.
• Each day opens within the body of the previous day.
• Each day closes near or at the low of the day.

Note: Bearish trend and High reliability

Three White Soldiers pattern

In a downtrend three long white days occur with consecutively higher closes. Generally this suggests future market fortitude, as a reversal is in progress that is building on moderate upward steps.

• Three long white days occur, each with a higher close than the previous day.
• Each day opens within the body of the previous day.
• Each day closes near or at the high of the day.

Note: Bullish trend and High reliability

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