Mon. Oct 3rd, 2022

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Candlesticks with Support and Resistance

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Single candlesticks and candlestick patterns are often wont to confirm or mark support levels. Such a price might be formed after an extended decline, or it might be a confirmation of a previous price . In a trading range, candlesticks can help choose entry points for buying near support and selling near resistance.

Bullish reversal candlesticks and patterns indicate that purchasing pressure overcame early selling pressure for a robust finish. This bullish price action suggests enough strong demand that support might be found.

The inverted hammer, long white candlestick, and marubozu show increased buying pressure rather than an actual price reversal. With its long upper shadow, an inverted hammer signifies intra-session buying interest that faded by the finish. Even though the safety finished well below its high, the power of buyers to push prices higher during the session is bullish. The long white candlestick and white marubozu signify sustained buying pressure during which prices advanced sharply from hospitable close. Signs of increased buying pressure bode well for support.

The doji and spinning top denote indecision and are generally considered neutral. These non-reversal patterns indicate a decrease in selling pressure, but not necessarily a revival of buying pressure. After a decline, the appearance of a doji or spinning top denotes a sudden letup in selling pressure. A stand-off has developed between buyers and sellers, and a support level may form.

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