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What is a Piercing Pattern?The piercing pattern or piercing line pattern consist of two candlesticks, first a black and then a white. The two candlesticks should have large real bodies and preferably short or nonexistent shadows. First the white candlestick must open below the previous close (even better is when the candle gaps below the lower shadow, or previous day's low) and closes at least halfway into the real body of day one. A close below the halfway point might still be a reversal but will not be considered a piercing candle and if it rises above the real body of the previous candle, it would be a bullish engulfing.
The pattern should appear after three or more black candles. The higher the close is into the previous candle's body the stronger the signal. Also, if the pattern occurs at some type of support with above average volume the signal is very reliable. Leave Piercing Pattern and go back to Japanese Candlestick Charts
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