Giles Coghlan LLB, Lth, MA
HYCM
The piercing pattern
Some candlestick price patterns are well known, like shooting stars, hammer reversal bars, and engulfing bars. However, some of the less well-known candlestick price patterns are worth noting when reading price charts. This is particularly helpful when you are managing a position on the longer-term charts. First, let’s look at the piercing pattern with an example of how this looks from Apple’s price charts.
The piercing pattern described
The piercing pattern is a candlestick pattern used in trading to show that a downtrend might be ending and the price could start going up. It has two candlesticks. It is particularly useful when assessing whether a downtrend is about to come to an end. The pattern is subtle and easily overlooked, so this is what to specifically look for. Note the gap that is needed for the second candlestick pattern.
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Candlestick 1: The first candlestick in the pattern is a bearish candlestick, indicating selling pressure. It represents a continuation of the existing downtrend and opens near or above the previous candlestick’s close.
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Candlestick 2: The second candlestick is a bullish candlestick, which opens lower than the previous candlestick’s close. Note: There is a price gap between the close of the first candlestick and the open of the second candlestick. Intraday, it would look like the bears are taking prices to even lower lows. However, the tide changes with the second candlestick.
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Close of candlestick 2: The crucial aspect of the piercing pattern comes with the second candlestick, as it must close at least halfway into the real body of the first candlestick. In other words, the second candlestick’s closing price is significantly higher than the first candlestick’s midpoint.
The piercing pattern on the charts
Take a look here for a market example of what candlestick 1 and candlestick 2 from the Apple Weekly chart should look like.
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Editors’ Picks
EUR/USD snaps its four-day losing streak, hovers around 1.0650, focus on German IFO data
The EUR/USD pair snaps its four-day losing streak during the early Asian session on Monday. Market participants will digest the outcome of the Federal Reserve (Fed) meeting last week and await the US Core Personal Consumption Expenditure (PCE) index data due on Thursday.
GBP/USD consolidates in a range below mid-1.2200s, seems vulnerable near multi-month low
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USD/JPY looks to approach 148.50 on BoJ’s decision to keep interest rates unchanged
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Editors’ Picks
EUR/USD snaps its four-day losing streak, hovers around 1.0650, focus on German IFO data
The EUR/USD pair snaps its four-day losing streak during the early Asian session on Monday. Market participants will digest the outcome of the Federal Reserve (Fed) meeting last week and await the US Core Personal Consumption Expenditure (PCE) index data due on Thursday.
GBP/USD consolidates in a range below mid-1.2200s, seems vulnerable near multi-month low
GBP/USD enters a bearish consolidation phase near a multi-month low touched last Friday. The USD continues to draw support from the Fed's hawkish outlook and acts as a headwind. The BoE's surprise pause is seen undermining the GBP and contributes to capping the upside.
Gold recovers some ground above $1,920, investors await US GDP, PCE
Gold price recovers its recent losses near $1,924 during the early Asian trading hours on Monday. Meanwhile, the US Dollar Index (DXY), a measure of the value of USD relative to a basket of foreign currencies, recorded its tenth consecutive weekly gain and hovers around 105.55.
Worldcoin Price Prediction: Is WLD done with uptrend after 77% rally?
Worldcoin price has paused its uptrend as it currently trades at $1.57. This move comes after the altcoin rallied a whopping 77% in just three days, between September 13 and 16. As WLD hovers aimlessly, investors need to be patient to catch the next volatile move.
Week ahead – US core PCE and Eurozone flash CPIs eyed after rate pause signals
PCE inflation to grab attention on Friday as Fed signals higher for longer. But markets might be more worried about a government shutdown. Eurozone flash CPIs will also be the in the spotlight on Friday. Chinese PMIs to be watched for recovery signs.
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