Thrusting Pattern

The thrusting pattern is a bearish candlestick pattern that occurs in a downtrend. It is considered to be similar to the candlestick neck line patterns known as the “on neck” and the “in neck” patterns. The thrusting pattern is basically the same description as the “on neck” pattern except for the fact that it closes near and slightly below the midpoint of the previous day’s black body. To witness this pattern you must first see a white candlestick that closes in the previous black candle’s real body. It still closes however under the middle of the previous day’s real body.

In other words, for the thrusting pattern to occur, the following conditions must be met. First, the market must be in a downtrend. Second, the first day consists of a black candle. Third, a white candlestick appears and it gaps down from the previous day’s close. Lastly, the second day’s white candlestick closes just below the midpoint of the previous day’s candle and into the body of the black candlestick.

What does the thrusting pattern candle indicate is occurring in the markets?
This signal indicates that there is a lack of buyers in the market. Similar to the “on neck” pattern, a long black candle enhances the current downtrend. The following day opens lower; there is a small gap down, however there is a lack of strength in the up move with a move back up to the previous day’s low. The bulls are discouraged as the sellers step in and the downtrend continues.

Confirmation of a downtrend for this pattern is required on the third day and consists of a black candlestick, a lower close, or a gap down. It is important to note that this pattern is a stronger pattern than the on neck line and in neck line patterns but it is not as strong as the candlestick piercing pattern.

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 upside gap three method pattern.