BULLISH MEETING LINE
Definition
This pattern emerges during a downtrend. The first day’s black candlestick is succeeded by a white candlestick that opens significantly lower but closes at the same level as the previous session’s close. This pattern is akin to the Piercing Line pattern. However, the rebound on the second day differs. The Piercing Line’s second day closes above the midpoint of the first day’s body, whereas the Bullish Meeting Line’s second day closes at the same level as the first day. As a result, the Piercing Line is considered a more notable bottom reversal. Nonetheless, the Bullish Meeting Line also warrants due consideration.
Recognition Criteria
1. The market is currently defined by a dominant downward trend.
2. On the first day, a black candlestick is observed.
3. Then, we see a white candlestick on the second day.
4. The closing prices are the same or almost the same on both days.
Pattern Requirements and Flexibility
The Bullish Meeting Line pattern features two candlesticks: first a black candlestick followed by a white candlestick, both of which are of considerable length. The closing prices on both days should be identical or nearly the same.
Trader’s Behavior
The appearance of this pattern signifies a stalemate between bulls and bears. The market is in a downtrend when a strong black candlestick forms, reinforcing the trend. The next day opens significantly lower, boosting the bears’ confidence. However, the bulls launch a counterattack, driving prices up to close at, or very near, the previous session’s close. This action breaches the downtrend.
Buy/Stop-Loss Levels
The confirmation level is set at the last closing price. For confirmation, prices need to surpass this level.
The stop-loss level is set at the last low. After a BUY signal, the stop-loss is triggered if prices decline instead of rising and either close below the stop-loss level or record two consecutive daily lows below it, without any bearish pattern being detected.