Marubozu Candlestick Analysis
Marubozu is an important candle to look upon for all trader and investor when it forms on a candlestick chart because it gives an idea that, what trend is maintaining to be next, whether current trend is going to be continued or it’s going to be changed from now.
How to recognise Marubozu candle?
Marubozu candle is the only candle which is represented by its body only it does not have a wick or shadow and this is very rare to find exact Marubozu, so we need to check the candle which has very short wick/shadow or almost no shadow/wick to call it Marubozu candle on the chart.
Meaning
Marubozu candle indicate that stock has traded only in one direction that means either buyer or seller
dominated the entire session. Marubozu candle interpretation depends on its type and previous trend.
Let’s understand both type of Marubozu and its meaning in the technical chart.
Bullish Marubozu:
Like I said marubozu interpretation depend on its type and previous trend so
If there is bullish trend and Bullish marubozu forms it means that current trend will continue.
Current trend = Bullish =>Bullish marubozu = Trend Continue
If there is bearish trend and Bullish marubozu forms then it means current trend is going to reverse.
Current trend => Bearish =>Bullish Marubozu = Trend Reversa
Bearish Marubozu:
If there is bullish trend going on the chart and bearish marubozu
forms then it means current trend is going to reverse.
Current trend => Bullish =>Bearish Marubozu = Trend Reversal
If there is bearish trend going on the chart and bearish marubozu forms in the chart then it means current trend will continue further.
Current trend =>Bearish =>Bearish Marubozu =Trend Continue.