Meeting Lines

BULLISH MEETING LINES

Type:	Reversal
Relevance:	Bullish
Prior Trend:	Bearish
Reliability:	Medium
Confirmation:	Suggested
No. of Sticks:	2

Definition:

We sometimes see that market gaps sharply lower when it opens and then closes at the same level as the prior session’s close. This is seen following a black candlestick in a downtrend. Such an occurrence is called Bullish Meeting Lines Pattern that is a pattern reflecting a stalemate between bulls and bears.

Recognition Criteria:

1. Market is characterized by downtrend.
2. We see a black candlestick on the first day.
3. Then we see a long white candlestick on the second day. Its body is lower than the previous trend.
4. The closing prices are same or almost same on both days.
5. Both candlesticks are long but the second candlestick may be shorter than the first.

Explanation:

This pattern appears during a decline. The first candlestick of this pattern is long and black. However the next session opens sharply lower causing the bears to feel confident. Then the bulls start a counterattack pushing the prices up and leading to a close equal to previous close. The downtrend is now breached.

Important Factors:

The Bullish Meeting Lines Pattern is a pattern that is comparable to the Bullish Piercing Line Pattern. The Piercing Line has the same two-candlestick pattern. The main difference between the two is the fact that the bullish counterattack does not carry the prices up to the prior session’s white real body in the case of Bullish Meeting Lines Pattern. It can only get back to prior session’s close while The Piercing Line Pattern’s second line pushes well into the black real body. Consequently the Piercing Line Pattern is a more significant bottom reversal. Nonetheless, the Bullish Meeting Lines Pattern should also be respected.

The Bullish Meeting Lines Pattern requires confirmation of the reversal on the third day. This confirmation may be in the form of a white candlestick, a large gap up or a higher close on the third day.