Definition
Bullish Mat Hold is a trend continuation formation with a higher reliability. The formation consists of 5 candles. The first is a long white candle, followed by 3 smaller candles forming an inclining sub-trend. On the fifth day, a new maximum is formed.
- Trend: Continuation
- Expected trend: Bullish
- Previous trend: Bullish
- Reliability: Low
- Type: Bullish
- Number: 5
Recognition
- The market is in an upward trend.
- The first day is a long white candle.
- On the second day, the market opens in the trends direction, but turns into a black candle by the end of the day.
- Second, third, and fourth days are short candles showing a short correction, but the trading range does not fall below the first day’s.
- The fifth day is also a long white candle which exceeds the closing price of the first day’s candle.
Interpretation
The pattern shows up in an ascending trend, as the first day’s white candle shows. The first candle followed by and upward gap and 3 smaller candles forming an inclining sub-trend. At this point, one may expect a trend reversal, but after the consolidation phase, a strong white candle comes, drawing a new maximum point. The ascending trend is expected to continue, investors are recommended to keep their long positions.
Important factors
Bullish Mat Hold formation is similar to the Bullish Rising Three Methods formation. The difference is that the second, third, and fourth days close higher in the Bullish Mat Hold formation. The formation has a high reliability, but verification from another source is needed. The confirmation could come from a white candle with an upward gap or a higher closing price.
