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Friday, 12/08/2017 10:12:22 PM

Friday, December 08, 2017 10:12:22 PM

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A bullish homing pigeon is a double candlestick pattern that can appear in Japanese candlestick charts. Candlestick charting is very popular among technical traders, because it emphasizes both short-term intraday and interday price relationships; when it is used appropriately, the patterns contained in candlestick analysis can help identify trends and allow traders to spot exit and entry positions. The bullish homing pigeon pattern is easy to spot and understand, and it can act as a precursor to a reversal when it occurs during a significant downtrend.

The bullish homing pigeon is made up of a long bear candle, red or black, that is immediately followed by a much shorter bear candle completely located within the vertical range of the first candle. It is believed this candlestick pattern shows a real loss of enthusiasm by sellers, who have diminished ability to exit their positions and push the price any lower.

Momentum has clearly slowed with a bullish homing pigeon. While this could just be an indication of a weakening downtrend, it may be a sign of a coming trend reversal. Traders may elect to exit short positions or even enter long positions, especially if the market has been in a consistent downward movement.

The day following a bullish homing pigeon is particularly telling; if the next candle is bullish, or green or white, traders take it as confirmation of a reversal. Some traders even accept a large gap or a higher close on the following day, not necessarily requiring a positive trading session.



Read more: What does a Bullish Homing Pigeon pattern tells a trader? | Investopedia https://www.investopedia.com/ask/answers/112814/what-does-bullish-homing-pigeon-pattern-tells-trader.asp#ixzz50jIN4KIW
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