Reversal Candle-stick Setups - Piercing Line Candle Pattern

Bullish Candlesticks Setup Patterns

A Piercing Line Candlesticks Pattern and Dark Cloud Cover Candles Pattern look alike but the difference is that one occurs at the top of a up trend (Cloud Cover) & the other occurs at the bottom of a downwards trend (Piercing).

Upward Trend Reversal - Dark Cloud Cover Candlesticks Patterns

Downward Trend Reversal - Piercing Line Candles Patterns

Piercing Line Candle-stick Setup

Piercing line candle setup is a long black body followed by a long white body candlestick.

White body pierces the midpoint of the prior black body.

Piercing line candle setup is a bullish reversal pattern that occurs at the bottom of a market downward trend. Piercing line candlestick setup highlights that the market opens lower & closes above the midpoint of the black body.

Piercing line candle setup highlights that the momentum of the down trend is reducing and the trend is likely to reverse & move in an upward direction.

Piercing line candle pattern is shown below and it is known as a piercing line because it signifies that the market is piercing the bottom illustrating a market floor for the price downward trading trend.

Piercing Line Candle-stick Setup

Analysis Piercing Line Candlesticks Pattern

A buy signal is confirmed once price closes above neck-line which is the opening of the candle on the left of the Piercing Line candle setup.

This is a bullish candlestick pattern setup and price should continue moving upward & for a trader who puts a buy trade - should place stop loss orders just below the lowest price level.