Candlestick patterns provide a visual way to analyze stock prices and identify signals about market sentiment and potential trend reversals. The document describes several common candlestick patterns including hammer, hanging man, inverted hammer, shooting star, bullish/bearish engulfing, piercing, bullish/bearish harami, morning star, evening star, and doji. Each pattern has a specific formation and indicates whether the trend may be reversing from up to down or down to up.

1. CANDLESTICK PATTERNS
PRESENTED TO:
DR.KIRAN MEHTA
PRESENTED BY:
Jaspreet Kaur
Aarzoo Dua

2. CHART
• Charts are the working tools of technical analysts. Investors use charts
to plot the price movements of a stock over specific time frames. It’s
a graphical method of showing where stock prices have been in the
past.

3. TYPES
• CHART
LINE BAR CANDLESTICK

4. Candlestick
• Candlestick charts provide visual insight to current market psychology.
• A candlestick chart can be created using the data of high, low, open
and closing prices for each time period that you want to display.
• Each candlestick provides an easy-to-decipher picture of price action.
Immediately a trader can see and compare the relationship between
the open and close as well as the high and low.

5. •ONE CANDLESTICK PATTERN

6. HAMMER
FORMED AFTER A LONG DOWN TREND
BULLISH TREND REVERSAL CANDLE
SHADOW FORMED IS 2-3 TIMES LARGER THAN THE BODY
BOTTOM IS HAMMERED, PRICES TO GO UP
THE FOLLOWING DAY NEEDS TO CONFIRM THE HAMMER
SIGNAL WITH A STRONG BULLISH DAY

7. BANK OF INDIA

8. Hanging Man
• Prior Trend: Upward
• Potential: Down
• View: Prices will go down
• Position: short and after confirmation
• Identification: after peak of uptrend

10. INVERTED HAMMER
APPEARS IN THE DOWN TREND
SMALL BODY, LONG UPPER SHADOW(2-3 TIMES)
BUYERS ARE BACK IN THE MARKET, SELLERS ARE
EXHAUSTED
THE DAY AFTER THE INVERTED HAMMER SIGNAL OPENS
HIGHER
SHOOTING STAR
APPEARS IN THE UP TREND
SMALL BODY, LONG UPPER SHADOW(2-3 TIMES)
SELLERS ARE BACK IN THE GAME, BUYERS ARE EXHAUSTED
THE DAY AFTER THE SHOOTING STAR SIGNAL OPENS LOWER.

11. INVERTED HAMMER & SHOTING STAR

12. BULLISH ENGULFING
• Prior Trend: Down
• Potential: Up
• View: Prices will go up
• Identification: at end of downward trend
• Must confirm it

15. BEARISH ENGULFING
2 CANDLESTICK PATTERN: 1ST CANDLE BULLISH, ND
CANDLE BIG BEARISH, ENGULFS COMPLETELY THE 1ST
BULLISH CANDLE
FORMED AFTER AN UPTREND
POWRFUL SIGNAL AFTER A LONG UPWARD TREND……
IN BETWEEN TRENDS IT JUST SHOWS MOMENTARY
BUYING
SELLING OPPORTUNITY…PRICES MAY FALL NOW

16. ACC LTD. BEARISH ENGULFING

17. •TWO CANDLESTICK
PATTERN

18. PIERCING
• Prior Trend: Downward
• Potential: indicates uptrend
• View: may prices will go up
• Identification: 1st candle is bearish and forms a low in a downtrend
and 2nd candle opens little bit lower but closes above 1st candle’s mid
point.

21. BULLISH HARAMI
• Prior Trend: downward
• Potential: indicates market can be in uptrend
• View: prices can go high
• Identification: 1st candle is bigger and bearish near a bottom/after
downtrend and 2nd candle has small body contained within 1st candle.
• Wait for confirmation

24. BEARISH HARAMI
FORMED NEAR A TOP, AFTER AN UPTREND
1ST CANDLE IS BIGGER AND BULLISH
2ND CANDLE IS BEARISH AND HAS SMALL BODY,
CONTAINED WITHIN THE FIRST CANDLE
FOR A REVERSAL SIGNAL, CONFIRMATION IS NEEDED.
THE NEXT DAY SHOULD SHOW WEAKNESS
THE UPTREND HAS BEEN APPARENT. A LONG BULLISH
CANDLE OCCURS AT THE END OF THE TREND

25. BOSCH- BEARISH HARAMI

26. •THREE CANDELSTICK
PATTERN

27. MORNING STAR
• Prior Trend: downward
• Potential: Uptrend
• View: prices will go up
• Identification: 1st candle is bearish candle, 2nd is small body (situation
of indecision) and 3rd candle is bullish which closes more than half
size of 1st candle.

30. EVENING STAR
3 CANDLESTICK PATTERN
1ST CANDLE BULLSIH
2ND CANDLE SMALL BODY-INDECISION
3RD CANDLE BEARISH- CLOSES BELOW MID-POINT
OF 1ST CANDLE
CONDITION- STRONG AFTER AN UPTREND
INTERPRETATION- THE BEARS ARE READY TO TAKE
THE PRICES DOWN

31. HCCL- EVENING STAR

32. DOJI
REPRESENTS INDECISION
NO BODY- REFLECTS A BALANCE BETWEEN BUYING
AND SELLING
TREND COMING TO END

33. IDEA CELLULAR- DOJI