Definition
There are several days when the market opens with a gap in the direction of the trend and closes around the previous day’s closing price. The long black candle is followed by a white candle. This formation is called Bullish Meeting Lines.
- Trend: Reversal
- Expected trend: Bullish
- Previous trend: Bearish
- Reliability: Moderate
- Type: Bullish
- Number: 2
Recognition
- The market is in a downward trend.
- The first day is a black candle.
- The second day is a long white candle. Its body is lower than the previous trend.
- The closing prices of the two candles are the same (or similar).
- Both candles are long, but the second one could be shorter than the other.
Interpretation
Due to the panic on the first day, the price drops below the inclining trend. The share opens low on the next day, but the appearance of buyers brings back the share price close to the trend. The reversal is probable, but needs a confirmation. The signal is reliable if the share price returns to the trend on the next day.
Important factors
Bullish Meeting Lines is similar to the Bullish Piercing Line formation. Piercing Line also consists of two candles. However, the price is not pulled up to the first candle’s body for the Bullish Meeting Lines formation. The price stops at the previous day’s closing price. Consequently, the Piercing Line gives a more reliable trend reversal signal. Still, Bullish Meeting Lines should never be ignored. The signal needs to be confirmed on the third day. The confirmation could come from a white candle with an upward gap or a higher closing price.
