Definition:
The White Marubozu is a single candlestick pattern
characterized with a long white body having no shadows
on either end. It is an extremely strong bullish candlestick
pattern.
Recognition Criteria:
1. A white Marubozu does not have upper or lower shadows.
2. The day opens and prices continue to go up all day
thus forming a long white day with no lower shadow.
3. The day also closes at the high of the day and hence
with no upper shadow.
Explanation:
A White Marubozu simply means that the opening price
is equal to the low price of the day and the closing
price is equal to the high price of the day. This shows
that the buyers controlled the price action from the
first trade to the last trade. In a White Marubozu day,
the day opens and prices continue to rally up all day
long without looking back. The bulls were very strong
during the day at such a degree that it caused some
concern among the bears and led them to cover their
short positions thus adding fuel to the rally.
Important Factors:
What the White Marubozu says about the future course
of the trend depends a lot on the general picture. A
White Marubozu can possibly be the first part of a bullish
continuation pattern but it may also be interpreted
as a bearish reversal candlestick pattern depending
on the preceding day's candlesticks.
The White Marubozu is a single candlestick pattern
and consequently it has low reliability. It reflects
only one day's trading and it may show the continuation
of the trend but also may indicate reversal. It needs
to be used with other candlesticks for a better and
healthier judgment about the status of the trend.
