Mat Hold

The bullish mat hold candlestick is a strong continuation pattern that occurs during an uptrend. This candlestick pattern is similar to the rising three method in that is begins with a long white candle in an uptrend and it is then followed by three small real bodies that indicate a short downtrend. The only difference is that the third day’s black body (second black body) dips into the body of the large white candle. It can also be said that it resembles the two crows candlestick pattern.

In order to identify the mat hold candlestick pattern there are certain criteria that must be met. First, the market must be in an uptrend. Second, a long white candle must appear on the first day. Third, an upward gap occurs along with a black candlestick. Fourth, the following two days consist of small real bodies similar to that of the rising three method signal. These three small real bodies signify a brief downtrend but they still stay within the range of the first trading day. Last, a white candlestick forms as the final day gaps up and closes above the trading ranges of the previous four days. This creates a new high on the fifth day.

What does this signal indicate is occurring in the markets?
The mat hold candlestick pattern while similar to the rising three method is easier to identify and the counter trend days are less concerning. This pattern also signifies a resting period but again it does not create the same amount of concern. For three days the bears are unable to knock the price down to a significant degree, and the bulls step back in and regain their confidence. Basically, this pattern indicates that there were attempts to reverse the trend, but a reversal never occurred. The prices rise again and close at a new high therefore indicating that the events of the past few days were only a break in a strong upward trend. The upward trend should continue.

Confirmation for this pattern occurs in the form of a white candlestick with a higher close or a gap-up.

Japanese Candlesticks are the fastest way for new investors to quickly and accurately read stock charts. Once you are comfortable with the major candlestick signals, and you have learned how to read stock charts continue to expand your expertise by learning the various secondary Candlestick Patterns. Combine these with your favorite technical analysis indicators, such as the moving average, and you have the perfect trading arsenal for evaluating stocks, currencies, commodities, or exchange traded funds.

Continue to learn about continuation patterns and read about the candlestick neck line patterns.