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Candlestick Marubozu :: Technicals

Candlestick MarubozuCandlestick MarubozuIn Japanese, the term marubozu means "close-cropped." It is also commonly referred to as “shaven head" or "shaven bottom." Typically, the candlestick Marubozu is a long candle which means that the day's trading range has been large.

You will see that the Marubozu candlestick pattern lacks either an upper or lower shadow. Rarely, but you will come across a Marubozu lacking both an upper or lower shadow. Even after a strong gap, most stocks do experience a minor reversal, which does cast small shadow. Let us read more about the candlestick Marubozu pattern.

If a stock moves sharply higher during the day, day traders often seek to make profits toward the end of the session, creating a small upper shadow. On the other hand, if a stock has declined sharply, the short sellers will then generally cover before the close of trading forming a small lower shadow.

It is interesting to note a full Marubozu candlestick. A white candle signals extreme conviction among buyers and on the opposite, a black candle indicates that sellers were eager to flee.

White marubozu

The white marubozu candle is recognized by its long white body with no shadows on either end. Being an extremely strong bullish candlestick pattern, the day opens and prices continue to go up all day thus forming a long white day with no lower shadow.

The white marubozu pattern simply means that the opening price is equal to the low price of the day. Plus the closing price is equal to the high price of the day. This means that the buyers were controlling the price action from the first trade to the last trade The trend depends a lot on the general picture. A white marubozu may possibly make the first part of a bullish continuation pattern but it may also act as a bearish reversal candlestick pattern.

Black marubozu

Black marubozu pattern a characterized by a long black body, having no shadows on either end and with an extremely strong bearish candlestick pattern. black marubozu shows that the prices moved down all day long after the opening and the day closing at its lowest level.

A black marubozu candle gets formed when the opening price is equal to the high price of the day and the closing price is equal to the low price of the day. This communicates that the sellers were controlling the price action from the first trade to the last trade. The black marubozu pattern has low reliability.

Reflecting only one day’s trade with a potential to signal both continuation and reversal, it must be used with other candlesticks for the confirmation of a trend.

Latest Examble---Pattern found on MTNL(4/7/2014)


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