Piercing Line
Two-candle bullish reversal: a bearish candle followed by a bullish candle that opens below the prior low and closes above the midpoint of the first body.
The Piercing Line is a two-candle bullish reversal pattern. The first candle is a long bearish candle in a downtrend. The second candle opens below the first candle's low (a gap down), then closes above the midpoint of the first candle's real body.
The gap-down open extends bearish momentum, but buyers immediately take control and "pierce" back above the halfway point of the prior red candle. The deeper the second candle closes into the first (above 50%), the stronger the buying pressure. It is the bullish counterpart to the Dark Cloud Cover.
Example
At a support level, price gaps down to start the session, printing below the prior bearish close. Buyers absorb the gap and drive it back above the midpoint of the prior red candle. Volume on the second candle is nearly double the first — bulls are serious.
Related Terms
Bullish Engulfing
A large bullish candle that completely wraps the prior bearish candle's body — a strong demand-takes-control reversal signal at the bottom of a downtrend.
BeginnerCounterattack Line
Two opposite-coloured candles that close at the same price — bulls and bears fought to a draw — a potential reversal warning.
IntermediateDark Cloud Cover
Two-candle bearish reversal: a bullish candle followed by a bearish candle that opens above the prior high and closes below the midpoint of the first body.
BeginnerHammer
A single candle with a small body near the top and a long lower wick — buyers rejected a sharp intra-session sell-off — a bullish reversal signal.
BeginnerMorning Star
A three-candle bullish reversal: a long bearish candle, a small indecision candle gapping lower, then a large bullish candle recovering above the midpoint.
BeginnerTweezer Bottom
Two consecutive candles with matching lows at the bottom of a downtrend — the shared low was rejected twice, hinting at a floor.
Beginner