Technicals Stability Returns
Marubozu is a Japanese name which means "bald." It is also one of the most popular and well-known candlestick patterns. This candlestick pattern is hard to miss, with a full-length body and barely any shadow or wick. Depending on its appearance in the trading chart, this candlestick pattern strongly indicates a trend reversal or continuation.
A perfect marubozu is extremely rare on a daily, weekly, or monthly chart, but it can be seen on intraday charts during periods of very volatile and strong movement.
Bullish Marubozu indicates that there are many traders and investors showing interest in particular stock at any price during the day. When it is formed, it means the stock price opened at a certain level and kept rising without falling down. A perfect marubozu is extremely rare, which makes it difficult for traders to identify when to trade in the market. As a result, most traders overlook minor differences in stock opening and closing prices, setting a high/low price.
A perfect marubozu candle is one in which the opening price equals the low and the closing price equals the high. It has no shadow, unlike the bullish closing and opening marubozu. As previously said, the perfect marubozu is extremely difficult to find on the daily, weekly, and monthly charts. However, it may be observed on intraday charts on 5 minute, 10 minute, 15 minute, and so on ticks. It signifies a strong bullish indication when it shows up on charts with high volume.
A bullish opening marubozu is formed when the opening price is equal to its low. It is dependent on the context as a reversal or continuation candle, similar to bullish marubozu. The difference between the two is that the bullish marubozu has no shadow, but the opening marubozu has an upward shadow. To form an opening marubozu, it must have at least 90% to 95% of the candle body compared to the height of the entire candle. When it appears during an uptrend, it may indicate a continuation of the trend.
A bullish closing marubozu is formed when the closing price is equal to its high and it has a lower shadow. A bullish closing marubozu is the inverse of a bullish opening marubozu. There is no upper shadow. However, it is similar to both bullish marubozu and bullish opening marubozu in that it may act as a reversal or continuation candle depending on the circumstances. It must have at least 90% to 95% of the candle body compared to the height of the entire candle.
If it appears during an uptrend, it is a far stronger indicator of the trend's continuance than the opening marubozu candle. This is because the high and close prices are the same, indicating that the market maintained its strength until the conclusion of the period.
The bullish Marubozu candle indicates that the buyers have complete control of the market. The level of buying pressure is so high that market participants are willing to buy stock at any price during the market. As a result, the stock price closes near its high point for that time.
The appearance of Bullish Marubozu candles during an uptrend strongly suggests that the trend will continue. When they appear in a downtrend, it signals that the trend is about to reverse. A situation like this indicates a shift in market sentiment, indicating that the stock traded is now bullish.
When the marubozu candlestick pattern is combined with additional technical indicators such as moving average, volume, RSI, supertrend, and so on, it validates the pattern and helps traders' to immediately identify a trend change or a buy signal.
When the bullish marubozu occurs in a downtrend with high volume, it can be seen as a trend reversal indicator. When the next one or two candles are also bullish with large volume compared to the Marubozu candle, it provides a strong bullish signal and traders can enter trades at these points. Mostly aggressive traders enter at the bullish marubozu's closing price. Conservative traders, on the other hand, should wait for the next candle to appear. Stop loss should be used here at a bullish marubozu's opening or low price. In this strategy, a trailing Stop loss will be more useful.
For Intraday, a strong bullish signal is indicated when a bullish marubozu crosses over the resistance level and forms or crosses above the 200 EMA (Exponential Moving Average). Keep in mind that the exponential moving average with bullish marubozu is dependent on the tick you choose (such as intraday ticks like 5 min, 10 min, or daily, weekly...). The longer the period tick (timeframe tick) of marubozu, choose smaller moving average periods. This will help traders or analysts to confirm the trend indicated by the bullish marubozu.
TSR will provide you with pre-created screeners in PreScreener, which you can simply select from. For example, Bullish Marubozu on Daily tick.
(A) In custom screener you can select multiple candlestick patterns along with Bullish Marubozu, such as bullish harami, three white soldiers, and many more.
(B) Create your own powerful, customised strategies with Custom Screener. For example, Bullish Marubozu crossing above 200 EMA on a 5 min tick. ( You can choose from a variety of ticks in TopStockResearch, from a 5-minute tick to a monthly tick, and choose your stock basket depending on your needs.)
Simple Bullish Marubozu Screeners are available in public view for free while more comprehensive screeners are available to premium customers.
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