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Definition

 

Bullish Matching Low is two consecutive black candles with same closing prices. The formation suggests short position openings, but a reversal can come on the third day.

  • 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 long black candle.
  • The second day is also a black candle. It closes at (or close to) at the previous day’s closing price.

Interpretation

The market is in an inclining trend, confirmed by the black candle on the first day of the formation. On the next day, the market opens higher, but closes at the same level as on the previous day. Investors opening short positions should be careful. If they don’t take the Bullish Matching Low seriously, they might have to close their positions shortly. The formation shows a short-term support and is characterised by a weakening supply on the market.

Important factors

The trend reversal needs to be confirmed. The confirmation could come from a white candle with an upward gap or a higher closing price.