Piercing Pattern

This is also a two candlestick pattern. This pattern is opposite of Dark cloud cover pattern .It is a bullish reversal candlestick pattern.

Piercing pattern is a two-candle pattern that appears in downtrend. The first candle is a strong body bearish candlestick pattern. The next candle opens lower but closes above the mid-point of the earlier candle body.

The next session turns out to be a bullish candlestick formation and closes above the point A (Mid-point of the earlier candle body).

It is a bullish pattern that warns us about the possibility of the reversal. It indicates that the downtrend is weakening.

The piercing pattern is a two-candle pattern. The first candle is a bearish body candlestick pattern. Second bullish body candle opens below the body of the first candle and closes above the mid-point of the first candle.

Piercing pattern is a bullish reversal pattern but it needs more confirmation, it tells us that the bears need to be more careful.

The scenario would be bullish if price sustains above the high of the second candle of the Piercing pattern. If price goes below bottom of the second candle of the Piercing pattern, it negates the pattern and becomes a bearish event.

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This pattern can be plotted on the chart by adding it from the study menu in TradePoint & RZone. The pattern is also available in the system builder section. By combining this pattern with other patterns and indicators, you can create your own trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.

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