Single Candlestick
The following are single candlestick formations that can signal possible bearish or bullish scenarios in the succeeding day(s) ahead. Individual candlesticks work best when paired with a confirmation candlestick on the next day to increase the chances of getting the technical analysis right. These work well on various time frames from daily to yearly charts.
Reminder: Candlesticks serve as guidelines. They are not rigid rules such that if a bullish candlestick appears, then it would be certain that the stock would go up the next day. Characteristics of candlesticks vary as well. For example, a hammer candlestick with a considerably long shadow, but not as long as it should be can still be considered as a hammer formation.
Hammer
- Appears in a downtrend
- Must have small real bodies and long lower shadow ( as much as possible shadow is twice the height of real body)
- Real body can either be white or black.
- More bullish if the real body is white than black
- More bullish if the lower shadow is very long
- Effect: Signals a stop in a downtrend.
Hanging Man
- Appears in an uptrend
- Must have small real bodies and long lower shadow ( as much as possible shadow is twice the height of real body)
- Real body can either be white or black.
- More bearish if the real body is black than white
- More bearish if the lower shadow is very long
- Effect: Signals a lull or peak in an uptrend.
Inverted Hammer
- Appears in a downtrend
- Must have small real bodies and longer upper shadow
- Real body can be black or white
- More bullish if the real body is white than black
- Effect: Signals a bottom.
Shooting Star
- Appears in an uptrend
- Must have small real bodies and longer upper shadow
- Real body can be black or white
- More bearish if the real body is black than white
- Effect: Signals a peak.
Doji Star
- Appears either in a downtrend or uptrend
- Must have a very tiny or no real body at all
- Has small shadows on either end of the body
- A bullish or bearish candlestick on the succeeding day can confirm a potential reversal
- Effect: Signals a potential major reversal.
Long-Legged Doji
- Appears on downtrends or uptrends
- Also known as the Rickshaw Man candlestick
- It shows indecisiveness in the market
- Highly dependent on the next candlestick, whether it would have a bullish or bearish rally
- Effect: Signals neutrality in the market.
Dragonfly Doji
- Appears either in a downtrend or uptrend
- Must have a very tiny or no real body at all and very long lower shadow
- A bullish or bearish candlestick on the succeeding day can confirm a potential reversal
- Effect: Signals a potential major reversal from a downtrend or uptrend.
Gravestone Doji
- Appears either in a downtrend or uptrend
- Must have a very tiny or no real body at all and very long upper shadow
- A bullish or bearish candlestick on the succeeding day can confirm a potential reversal
- Effect: Signals a potential major reversal from an uptrend or downtrend.