Definition: Get the highest rated stock from Americanbulls for this pattern >>>
Bullish Matching Low Pattern occurs when two black
days appear with equal closes in a downtrend. The pattern
is suggestive of a short-term support, and it may cause
a reversal on the next day of trading.
Recognition Criteria:
1. The market moves in downtrend.
2. We then see a long black candlestick on the first day.
3. Second day follows with another black candlestick whose
closing price is equal or extremely close to the closing
price of the first day.
Explanation:
Market continues to move down as evidenced by first
black candlestick. Next day; prices open at a higher
level, they then continue to go up during the day but
the day closes at a price which is equal to the closing
price of the previous day. This pattern suggests a short-term
support. Shorts should be aware of this fact. If they
ignore Bullish Matching Low Pattern as a possible reversal
signal, they may pay for it soon. Two days closing at
the same price is indicative of short-term support and
this support may be followed by a reversal on the next
day of trading.
Important Factors:
The reversal of downtrend requires a confirmation on
the third day. The confirmation of the trend reversal
may be in the form of a white candlestick, a large gap
up or a higher close on the next trading day (on the
third day).
