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To evaluate the performance of the pattern in your stock exchange within the context of other global markets, please refer to the table below. Locate your stock market to see its ranking among others. This will provide insights into the pattern’s strength and reliability, aiding you in your buying and selling decisions.
BEARISH MEETING LINE
Definition
This pattern occurs during an uptrend. The first day’s white candlestick is followed by a black candlestick that opens sharply higher and closes at the same level as the prior session’s close. It is similar to the Dark Cloud Cover pattern; however, the amount the second day drops is different. The Dark Cloud Cover’s second day closes below the midpoint of the first day’s body, whereas the second day of the Bearish Meeting Line closes at the same level as the first day. Consequently, the Dark Cloud Cover is a more significant top reversal. Nonetheless, the Bearish Meeting Line should also be respected.
Recognition Criteria
1. The market is currently defined by a dominant upward trend.
2. On the first day a white candlestick is observed.
3. Then, we see a black candlestick on the second day.
4. The closing prices are identical or nearly identical on both days.
Pattern Requirements and Flexibility
The Bearish Meeting Line consists of two candlesticks: first, a white candlestick, followed by a black candlestick, both of which are not short. The closing prices of both days should be the same or very close.
Trader’s Behavior
The occurrence of this pattern reflects a stalemate between bulls and bears. The market is in an uptrend when a strong white candlestick forms, further supporting the trend. The next day opens sharply higher, boosting the bulls’ confidence. However, the bears counterattack, pushing prices down leading to a close equal to or very close to the previous close. The uptrend is now breached.
Sell/Stop-Loss Levels
The confirmation level is determined by the last close. For confirmation, prices should fall below this level.
The stop-loss level is defined as the last high. If, following the bearish signal, prices rise instead of falling and either close or make two consecutive daily highs above the stop-loss level, without detecting any bullish pattern, the stop-loss is triggered.