Definition:
The Black Opening Marubozu is a single candlestick
pattern characterized by a long black body, a lower
shadow and absence of upper shadow. It is a strongly
bearish candlestick pattern.
Recognition Criteria:
1. A Black Opening Marubozu has a lower shadow.
2. The day opens and prices go below the opening price.
Prices continue to move down all day thus forming the
long black body.
3. The closing price is below the opening price but
not at the low of the day that gives us the lower shadow.
Explanation:
The Black Opening Marubozu is a single candlestick
pattern characterized by its long black body, displaying
a shadow on the closing side but no shadow on the opening
side. This shows that the day opened and prices continuously
went down but they did not close at the low of the day
and thus they created a lower shadow. It is a day for
bears and such a bearish rally should cause concern
among the bulls.
Important Factors:
A Black Opening Marubozu may be interpreted either
as the initial phase of a bearish continuation pattern
or it may also signal a bullish reversal depending on
the preceding day's candlesticks.
In the case of an uptrend, a Black Opening Marubozu
is called as a Bearish Belt Hold Pattern.
The Black Opening Marubozu is a single candlestick
pattern with low reliability. It only reflects one day's
trading and may be pointing either continuation or reversal.
Hence it must be considered with other candlesticks
to better judge the direction of the trend.
