After a hammer candle K4, there are two small candles K5 and K6 with lowest volume,
Which verified a fact that the supply or demand pressure temporarily dried out here.
The following candle is more likely to price down to test the support of neckline,
After the test, there will be more evidence to evaluate the support is strong or weak.
Note
After three soldiers stalled pattern(K1 to K3),
followed a potential bearish flag.
K4 and K5 is bearish engulfing pattern,
it seems that the price try to break down.
If the following candle K6 or K7 stay upon the neckline, the price will go up to test upper limit of K2.
If the following candle K6 breakdown with increased volume like K2 and closed below the neckline, the flag pattern will complete, and downtrend will recover immediately.
Note
Compared to K2, K3 has an increased volume, which means the supply increased at present,
it is a hammer candle and is also the first unsuccessful test of K1,
If we want to buy here, we need more evidence.
It is not a good place to short it here too.
Note
Compared to K4, K5 is a long-legged doji candle, which means the support and demand here is in a balance status.
It is a signal that the three soldiers pattern (K1 to K3) failed to expand its territory for now.
The volume of K5 obviously increased, but unfortunately, it can't closed upon the middle line of the box.
Which verified that K4 is an unsuccessful test of K3.
So, the price here is not likely to go up immediately.K6 is more likely test K3 for a second time,
There may be a chance to buy then.
if K6 close upon K5 under lower volume,it will be fine to buy in.
If K6 close below the lower limit of the box,the bear market may recover immediately.
Note
K3 break out of the upper limit of a flag pattern with increased volume.
The candle also closed upon the middle line of a box.
Which verified a short-term uptrend.
We can buy here(26255-26000), stop loss set at 25600.Price target is the upper price of K0.
Note
After I bought in, a dark-cloud cover pattern(K3 and K4) denied my operation immediately.
I choose to stop loss and get out of the market,waiting for other chances to buy in.
The previous analysis of flag pattern breaking up was totally wrong.
The dark-cloud cover pattern with relatively increased volume and long lower shadow but failed to closed below K3,
so, the bear market most likely couldn't recover immediately.The possibility of pricing up is still there.
This reverse pattern also increased the possibility of pricing down to test the lower limit of the box.
If K5 or K6 close upon K2, the short-term uptrend will recover.
Otherwise, the bear market will restore its strength.
Note
K5 and K4 is a dark-cloud cover pattern, and also a tweezers top reverse pattern.
Which means the supply pressure is increasing, the bear force may be in control.
K6 failed to closed upon or below K3, bear force and bull force is temporally in balance.
K6 is a dead corner to K5, which means the demand or supply both drop to the lowest level.
Dead corner break up or break down will most likely happen in K7.
If K7 break up and obviously close upon K3, the short-term uptrend will most likely recover.
Otherwise, if K7 break down and close below K3, the bear force will most likely recover immediately.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.