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Bearish Meeting Lines
Bearish Meeting Lines
This pattern occurs during an uptrend. The first day’s white candlestick is followed by a black candlestick that opens sharply higher and closes at the same level as the prior session’s close.
It is similar to the Dark Cloud Cover pattern. However, the amount the second day drops is different. The Dark Cloud Cover’s second day closes below the midpoint of the first day’s body, while the second day the Bearish Meeting Line closes the same as the first day.
Consequently, the Dark Cloud Cover is a more significant top reversal. Nonetheless, the Bearish Meeting Line should also be respected.
How to identify
1st day is a long white day.
2nd day is a long red day and closes at the 1st day’s close.
Psychology
An up day followed by a down day that closes at the previous day’s close gets traders to bet on a reversal.
It’s probably a good idea to wait for confirmation of the downtrend. This would be a lower close the next day.
