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Saturday, July 21, 2007

Falling Three Methods



The bearish Falling Method consists of two long black lines bracketing 3 or 4 small ascending white candlesticks, the second black line forming a new closing low.

Rising Three Methods



The Rising Method consists of two strong white lines bracketing 3 or 4 small declining black candlesticks. The final white line forms a new closing high. The pattern is definitely bullish.

Harami Candlestick



A Harami formation indicates loss of momentum and often warns of reversal after a strong trend. Harami means 'pregnant' which is quite descriptive. The second candlestick must be contained within the body of the first, though the shadows may protrude slightly.

Shooting Star



With a Shooting Star, the body on the second candlestick must be near the low -- at the bottom end of the trading range -- and the upper shadow must be taller. This is also a weaker reversal signal than the Morning or Evening Star.
The pattern requires confirmation from the next candlestick closing below half-way on the body of the first.

Doji Star


A Doji Star is weaker than the Morning or Evening Star: the doji represents indecision. The doji star requires confirmation from the next candlestick closing in the bottom half of the body of the first candlestick.

Evening Star



The Evening Star pattern is opposite to Morning Star and is a reversal signal at the end of an up-trend. The pattern is more bearish if the second candlestick is filled rather than hollow.

Morning Star


The Morning Star pattern signals a bullish reversal after a down-trend. The first candlestick has a long black body. The second candlestick gaps down from the first (the bodies display a gap, but the shadows may still overlap) and is more bullish if hollow. The next candlestick has a long white body which closes in the top half of the body of the first candlestick.