Hi Rahul...I'm happy for your gains in Ratnamani Metals. You're always welcome.
As for the piercing patterns in candlesticks charting, there is a fundamental point that you must note:
A pattern such as piercing bar is a Bullish Reversal sign.
Some other bullish reversal patterns are Bullish Engulfing, Bullish Harami, Hammer, Morning Doji Star etc.
In order to spot a piercing pattern, one must first look for an existing downtrend.
As you are in the midst of studying candlesticks, I will not get into the details on any of these.
As for IPCL, whether on daily, weekly or monthly charts, the trend is to the up.
On the daily there have been bouts of sideways periods in the recent past, but the trend is certainly to the up.
A piercing pattern at new highs cannot be considered a bullish reversal pattern. It would indicate continued buying where it's more likely to be a continuation pattern.
The next few bars will give confirmation.
In the attached charts, see a few bullish reversal patterns in 'IPCL DAILY'.
The struggle between the bulls and bears is prolonged leading to the final breakout.
Have a look at IPCL WEEKLY, and note what looks like a struggle, is in fact an ascending triangle in formation, before the breakout.
As an example of Bearish Reversal, the Dark Cloud Cover is the opposite of a piercing pattern.
First is a long white day. On the second day there is a black candle with open above the previous day high, with a close within but below the midpoint of the first days body.
In the dark cloud cover chart, the pattern forms on the weekly bar on October 15 2004. I've zoomed into it for better visibility. Have a look at it in your own s/w and note the decline from that point.
As for the signal line, yes, it is below the MACD in daily and weekly.
However, MACD uses Moving Averages and is therefore itself a lagging, trend following indicator.
The next couple of days should also clarify this issue.
Another interesting observation, there is a C&H breakout visible on the daily bar chart, do have a look. In the handle part there are two or three bars that extend well below the acceptable limit, and could likely be 'noise'. But for these it's a near perfect C&H breakout. Again the next moves will clarify this.
Hope this answers your issues, and do get back for any followup if you like.
All the best.
As for the piercing patterns in candlesticks charting, there is a fundamental point that you must note:
A pattern such as piercing bar is a Bullish Reversal sign.
Some other bullish reversal patterns are Bullish Engulfing, Bullish Harami, Hammer, Morning Doji Star etc.
In order to spot a piercing pattern, one must first look for an existing downtrend.
As you are in the midst of studying candlesticks, I will not get into the details on any of these.
As for IPCL, whether on daily, weekly or monthly charts, the trend is to the up.
On the daily there have been bouts of sideways periods in the recent past, but the trend is certainly to the up.
A piercing pattern at new highs cannot be considered a bullish reversal pattern. It would indicate continued buying where it's more likely to be a continuation pattern.
The next few bars will give confirmation.
In the attached charts, see a few bullish reversal patterns in 'IPCL DAILY'.
The struggle between the bulls and bears is prolonged leading to the final breakout.
Have a look at IPCL WEEKLY, and note what looks like a struggle, is in fact an ascending triangle in formation, before the breakout.
As an example of Bearish Reversal, the Dark Cloud Cover is the opposite of a piercing pattern.
First is a long white day. On the second day there is a black candle with open above the previous day high, with a close within but below the midpoint of the first days body.
In the dark cloud cover chart, the pattern forms on the weekly bar on October 15 2004. I've zoomed into it for better visibility. Have a look at it in your own s/w and note the decline from that point.
As for the signal line, yes, it is below the MACD in daily and weekly.
However, MACD uses Moving Averages and is therefore itself a lagging, trend following indicator.
The next couple of days should also clarify this issue.
Another interesting observation, there is a C&H breakout visible on the daily bar chart, do have a look. In the handle part there are two or three bars that extend well below the acceptable limit, and could likely be 'noise'. But for these it's a near perfect C&H breakout. Again the next moves will clarify this.
Hope this answers your issues, and do get back for any followup if you like.
All the best.
