Definition: Get the highest rated stock from Americanbulls for this pattern >>>
Market may gap up sharply as it opens but it closes
unchanged from the prior session’s close during
an uptrend. Such a pattern is called Bearish Meeting
Lines Pattern, which is a pattern that reflects a balance
between the bulls and the bears.
Recognition Criteria:
1. Market is characterized by uptrend.
2. We see a long white candlestick in the first day.
3. Then we see a long black candlestick, which has a body
that is also higher than the previous trend on the second
day.
4. The close of both days is same or almost same.
5. Both of the candlesticks are long but second day candlestick
may be shorter than the first.
Explanation:
The Bearish Meeting Lines Pattern is a top reversal
pattern suggesting a stall in uptrend. The first candlestick,
a long white one, shows that the bullish momentum is
going on. The next day opens higher with a gap but then
the bears pull prices down to the prior day’s
close. So the initial optimism on the second day’s
opening now turns into concern of the longs.
Important Factors:
The Bearish Meeting Lines Pattern is similar to the
Bearish Dark Cloud Cover Pattern. The Dark Cloud Cover
has the same two-candlestick pattern. The main difference
between the two is the fact that the bearish counterattack
line does not usually move into the prior session’s
white real body. It just gets back to prior session’s
close. The Bearish Dark Cloud Cover Pattern’s
second line pushes well into the white real body. So
the Dark Cloud Cover Pattern is a more important top
reversal signal than the Bearish Meeting Lines Pattern.
A confirmation on third day is required to be sure
that the uptrend has reversed. This confirmation may
be in the form a black candlestick, a large gap down
or a lower close on the third day.
