Definition:
The Black Spinning Top is a single candlestick pattern.
Its shape is a small black body with upper and lower
shadows having a greater length than the body's length.
Recognition Criteria:
1. The real body of the pattern is black and small.
2. The upper and lower shadows are longer than the real
body's length.
Explanation:
The market moves higher and then sharply lower, or
vice versa. It then closes below the opening price creating
a black body. This represents complete indecision between
the bulls and the bears. The actual length of the shadows
is not important. The small body relative to the shadows
is what makes the spinning top.
Important Factors:
If a Black Spinning Top is observed after a long rally
or long white candlestick, this implies weakness among
the bulls and it is a warning about a potential change
or interruption in trend.
If a Black Spinning Top is observed after a long decline
or a long black candlestick, this implies weakness among
the bears and it is a warning about a potential change
or interruption in trend.
Like most other single candlestick patterns, the Black
Spinning Top has low reliability. It reflects only one
day's trading and can be interpreted both as a continuation
and a reversal pattern. This pattern must be used with
other candlesticks for a better and healthier confirmation
of a trend.
