11. (BEARISH MATCHING HIGH) Bearish Candlestick Patterns - from candlesticker.com

To see the performance of the pattern in your stock exchange in the context of other stock markets please examine the table below. Find your stock market there and see how it ranks among the others. This will give you an idea about the pattern’s strength and reliability and help you in your selling decisions.

BEARISH MATCHING HIGH

Definition

This pattern occurs when two white days appear with equal closes in an uptrend. It indicates a top has been reached, even though the new high was tested and there was no follow through, which is indicative of a good resistance price.

Recognition Criteria

1. The market is characterized by a prevailing uptrend.
2. A white body is observed on the first day.
3. The second day follows with another white candlestick whose closing price is exactly equal to the closing price of the first day.

Pattern Requirements and Flexibility

The Bullish Matching High consists of two white candlesticks. The length of the first candlestick should be normal or long. Both candlesticks should close at the same level.

Trader’s Behavior

The market has been higher, as evidenced by another strong white day. The next day opens lower and trade still lower, and then it closes at the same price. This is indicative of short term resistance and will cause much concern with the bulls. The psychology of the market is not necessarily with the action behind the daily trading, but with the fact that both days close at the same level.

Sell/Stop Loss Levels

The confirmation level is defined as the midpoint of the first white body. Prices should cross below this level for confirmation.

The stop loss level is defined as the higher of the last two highs. Following the bearish signal, if prices go up instead of going down, and close or make two consecutive daily highs above the stop loss level, while no bullish pattern is detected, then the stop loss is triggered.

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