Sizzling Stock Picks

[Black_NITE]

BULLISH HOMING PIGEON

Bullish Homing Pigeon Pattern is a small black real body contained by a prior relatively long black real body.



Recognition Criteria:

1. Market is in downtrend.
2. We see a black body in the first day.
3. Then we again see a black body in the second day where the real body of this second day is completely engulfed by the real body of the first day. It is not required that the shadows (high/low) of the second candlestick are contained within the first, though it's preferable if they are.

Explanation:

The Bullish Homing Pigeon Pattern is a signal of disparity. In a market characterized by downtrend, we first see heavy selling reflected by the long, black real body of the first day. However small body of second day points out to diminished power and enthusiasm of the sellers thus suggesting a trend reversal.

Important Factors:

The important fact about this pattern is the requirement that the second day has a minute real body relative to the prior candlestick and that this small body is completely contained by the larger one. The Bullish Homing Pigeon Pattern is not necessarily a signal for a rally. Market usually has a tendency to enter into a congestion phase following a Homing Pigeon.

We must check the third day to confirm that the downtrend has reversed. This confirmation may be in the form of a white candlestick, a large gap up or a higher close on the next trading day (on the third day).