Definition
Neutral Umbrella is a Doji candle with no upper shadow. The lower shadow is relatively long. This long lower shadow represents the strength of the buying side. Neutral Umbrella can signal a trend reversal.
- Trend: Reversal
- Expected trend: Neutral
- Previous trend: Neutral
- Reliability: Moderate
- Type: Neutral
- Number: 1
Recognition
- The body of the Neutral Umbrella is a horizontal line (or very small).
- The candle has no upper shadow.
- The lower shadow is relatively long.
Interpretation
The opening and closing prices are equal. It is also the daily maximum. The formation has a long lower shadow. May signal an inclining trend’s reversal, but a confirmation on the next day is necessary.
Important factors
Neutral Umbrella means a possible change into an ascending trend if the candle appears in a long-term inclining trend, after a black candle, and at the bottom of the channel. It can also serve as a support. It also means the possibility of an inclining trend if the candle appears in a long-term ascending trend, after a white candle, and at the top of the channel. It can also serve as a resistance. In both cases, it requires a bearish or bullish confirmation.
