With weakness in early trading and a strong close, a number of bullish candlestick patterns formed on Wednesday. These include hammers and dragonfly doji. There were also hundreds of hollow red candlesticks. These form when the close is above the open, but the close is still below the prior close. This candlestick reflects a bounce after a weak open. One day does not a trend change make and this is why one and two day candlestick patterns require follow-through to confirmat a reversal. Also keep in mind that candlesticks are short-term in nature and these patterns will not affect the medium or long-term trends.
About the author:
Arthur Hill, CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London.
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