CANDLESTICK PATTERNS
PRESENTED TO:
DR.KIRAN MEHTA
PRESENTED BY:
Jaspreet Kaur
Aarzoo Dua

CHART
• Charts are the working tools of technical analysts. Investors use charts
to plot the price movements of a stock over specific time frames. It’s
a graphical method of showing where stock prices have been in the
past.

TYPES
• CHART
LINE BAR CANDLESTICK

Candlestick
• Candlestick charts provide visual insight to current market psychology.
• A candlestick chart can be created using the data of high, low, open
and closing prices for each time period that you want to display.
• Each candlestick provides an easy-to-decipher picture of price action.
Immediately a trader can see and compare the relationship between
the open and close as well as the high and low.

•ONE CANDLESTICK PATTERN

HAMMER
FORMED AFTER A LONG DOWN TREND
BULLISH TREND REVERSAL CANDLE
SHADOW FORMED IS 2-3 TIMES LARGER THAN THE BODY
BOTTOM IS HAMMERED, PRICES TO GO UP
THE FOLLOWING DAY NEEDS TO CONFIRM THE HAMMER
SIGNAL WITH A STRONG BULLISH DAY

BANK OF INDIA

Hanging Man
• Prior Trend: Upward
• Potential: Down
• View: Prices will go down
• Position: short and after confirmation
• Identification: after peak of uptrend

INVERTED HAMMER
APPEARS IN THE DOWN TREND
SMALL BODY, LONG UPPER SHADOW(2-3 TIMES)
BUYERS ARE BACK IN THE MARKET, SELLERS ARE
EXHAUSTED
THE DAY AFTER THE INVERTED HAMMER SIGNAL OPENS
HIGHER
SHOOTING STAR
APPEARS IN THE UP TREND
SMALL BODY, LONG UPPER SHADOW(2-3 TIMES)
SELLERS ARE BACK IN THE GAME, BUYERS ARE EXHAUSTED
THE DAY AFTER THE SHOOTING STAR SIGNAL OPENS LOWER.

INVERTED HAMMER & SHOTING STAR

BULLISH ENGULFING
• Prior Trend: Down
• Potential: Up
• View: Prices will go up
• Identification: at end of downward trend
• Must confirm it

BEARISH ENGULFING
2 CANDLESTICK PATTERN: 1ST CANDLE BULLISH, ND
CANDLE BIG BEARISH, ENGULFS COMPLETELY THE 1ST
BULLISH CANDLE
FORMED AFTER AN UPTREND
POWRFUL SIGNAL AFTER A LONG UPWARD TREND……
IN BETWEEN TRENDS IT JUST SHOWS MOMENTARY
BUYING
SELLING OPPORTUNITY…PRICES MAY FALL NOW

ACC LTD. BEARISH ENGULFING

•TWO CANDLESTICK
PATTERN

PIERCING
• Prior Trend: Downward
• Potential: indicates uptrend
• View: may prices will go up
• Identification: 1st candle is bearish and forms a low in a downtrend
and 2nd candle opens little bit lower but closes above 1st candle’s mid
point.

BULLISH HARAMI
• Prior Trend: downward
• Potential: indicates market can be in uptrend
• View: prices can go high
• Identification: 1st candle is bigger and bearish near a bottom/after
downtrend and 2nd candle has small body contained within 1st candle.
• Wait for confirmation

BEARISH HARAMI
FORMED NEAR A TOP, AFTER AN UPTREND
1ST CANDLE IS BIGGER AND BULLISH
2ND CANDLE IS BEARISH AND HAS SMALL BODY,
CONTAINED WITHIN THE FIRST CANDLE
FOR A REVERSAL SIGNAL, CONFIRMATION IS NEEDED.
THE NEXT DAY SHOULD SHOW WEAKNESS
THE UPTREND HAS BEEN APPARENT. A LONG BULLISH
CANDLE OCCURS AT THE END OF THE TREND

BOSCH- BEARISH HARAMI

•THREE CANDELSTICK
PATTERN

MORNING STAR
• Prior Trend: downward
• Potential: Uptrend
• View: prices will go up
• Identification: 1st candle is bearish candle, 2nd is small body (situation
of indecision) and 3rd candle is bullish which closes more than half
size of 1st candle.

EVENING STAR
3 CANDLESTICK PATTERN
1ST CANDLE BULLSIH
2ND CANDLE SMALL BODY-INDECISION
3RD CANDLE BEARISH- CLOSES BELOW MID-POINT
OF 1ST CANDLE
CONDITION- STRONG AFTER AN UPTREND
INTERPRETATION- THE BEARS ARE READY TO TAKE
THE PRICES DOWN

HCCL- EVENING STAR

DOJI
REPRESENTS INDECISION
NO BODY- REFLECTS A BALANCE BETWEEN BUYING
AND SELLING
TREND COMING TO END

IDEA CELLULAR- DOJI