Piercing Pattern is one of the Bearish trend reversal signal in the Candlestick Chart analysis. It requires 2 candlesticks to form Piercing Pattern. It will occur after a sharp fall in the price. On the day of the Pattern formation the asset will open below the Yesterday's low price. That means the asset is still in down trend. During the day of the trade it raise in price and will color at least half of the previous day's candlestick body.
The price is attempting to break the current down trend by moving above. Buyers are the winner in the battle between buyers & sellers. In the next day, it is expected to close above the Piercing Pattern's day high. The traders can keep Pattern low as stop price. Break the low, will nullify the pattern formation and will become no longer valid.
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The price is attempting to break the current down trend by moving above. Buyers are the winner in the battle between buyers & sellers. In the next day, it is expected to close above the Piercing Pattern's day high. The traders can keep Pattern low as stop price. Break the low, will nullify the pattern formation and will become no longer valid.