Definition:
This pattern is characterized by a white candlestick
in a downtrend, which is followed by a sharply lower
gap when market opens next day and shows an opening
price equal to the prior day’s opening price and
also a lower closing price, which is a Black Opening
Marubozu.
Recognition Criteria:
1. The market is characterized by downtrend.
2. We see a long white candlestick in the first day.
3. Then we see a black body, which has the same opening
price as the first day, or extremely close to it.
4. The second day candlestick is a Black Opening Marubozu.
Explanation:
A white real body (especially a relatively long one)
is a matter of concern for the shorts during downtrend.
It shows that the bulls may be gaining control. However,
if the next day opens with a downward gap and an opening
price equal to the previous day’s opening price,
this reinstates the bear confidence. If furthermore
the day closes lower, bears feel even more confident
about the fact that the downtrend will continue.
Important Factors:
The black candlestick must be a Black Opening Marubozu.
A confirmation on the third day is required to justify
that the downtrend is still strong. The confirmation
may be in the form of a black candlestick, a large gap
down or a lower close on the third day.
