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Forecast: bearish reversal / bearish continuation
Trend prior to the pattern: downtrend/uptrend
Opposite pattern: Bullish Strong Line
Construction:
- black body
- upper and lower shadow is not required
- none of the shadows can be larger than the body
- the candlestick body three times higher than the average body of the last 5 or 10 candles
- appears on as a long line
The pattern may be formed by the following basic candles: Long Black Candle, Black Marubozu, Opening Black Marubozu or Closing Black Marubozu. What is crucial is that the candlestick body needs to be at least three times longer than the average body of the last 5 or 10 candles.
Some other authors, for example, Bulkowski, are describing the pattern called Long Black Day. In our approach, what they treat as a Long Black Day, we call Long Black Candle, and it is a basic candle. We introduce the Bearish Strong Line pattern, because apart from the case where the candle contains both shadows (Long Black Candle), we also allow marubozu candles. It makes sense, because why to exclude perfectly strong black candle only because one or two shadows do not exist?
The Bearish Strong Line forms a resistance zone, which is stronger when the candle appears at a higher trading volume.
It may happen that at the same time the pattern may be considered as the Bearish Belt Hold pattern (Opening Black Marubozu basic candle). Such occurrence of Bearish Belt Hold should be seen as very bearish because we deal with a candle body being at least three times higher than the average body of the last 5 or 10 candles.
There are even more patterns in which the Bearish Strong Line may appear. For example Piercing, Bullish Harami, Bearish Engulfing, Dark Cloud Cover.
As a rule of thumb, the pattern should not be ignored, because it forms a significant resistance zone. It may be especially important in the context of bullish patterns where the Bearish Strong Line exists.
The Bearish Strong Line occurs often on the charts which make this pattern useful from the trading perspective. However, its efficiency should be evaluated for a particular market/asset.
Bearish Strong Line statistics
Below you can find some Bearish Strong Line pattern statistics calculated by CandleScanner software.
Scanner settings: daily stocks
Group: S&P500
Number of symbols: 502
Date range: 7/1/1995 - 6/30/2015
Time interval: daily candles
Total number of candlesticks: 2,236,421
Number of occurrences (Bearish Strong Line): 43,028
Number of occurrences (all candlestick patterns): 638,570
% of occurrences (Bearish Strong Line): 6.74 %
Average frequency: 52.0
Efficiency statistics (5 candlesticks testing period)
Efficiency | NO DATA | FALSE | LOW | MEDIUM | HIGH |
---|---|---|---|---|---|
Number of Occurrences |
194 | 9,717 | 11,397 | 7,709 | 14,011 |
% of Occurrences |
0.45 % | 22.13 % | 26.49 % | 17.92 % | 33.01 % |
Efficiency | NO DATA | FALSE | LOW | MEDIUM | HIGH |
---|---|---|---|---|---|
Number of Occurrences |
225 | 9,341 | 9,474 | 6,818 | 17,170 |
% of Occurrences |
0.52 % | 21.19 % | 22.02 % | 15.85 % | 40.42 % |
Occurrences Statistics | 5 candlesticks testing period (HIGH efficiency) |
10 candlesticks testing period (HIGH efficiency) |
||||
---|---|---|---|---|---|---|
Symbol | Number of Occurrences |
Average Frequency |
Number of Occurrences |
% of Occurrences |
Number of Occurrences |
% of Occurrences |
GLW | 99 | 50.8 | 52 | 52.53 % | 56 | 56.57 % |
WDC | 99 | 50.8 | 50 | 51.52 % | 53 | 55.56 % |
CTL | 106 | 47.5 | 47 | 46.23 % | 56 | 54.72 % |
F | 112 | 44.9 | 46 | 41.96 % | 58 | 52.68 % |
FCX | 99 | 50.8 | 47 | 47.48 % | 52 | 52.53 % |
NFX | 111 | 45.3 | 51 | 45.94 % | 57 | 51.35 % |
AMG | 96 | 46.1 | 39 | 41.67 % | 48 | 51.05 % |
DVN | 96 | 52.4 | 40 | 41.66 % | 49 | 51.04 % |
R | 102 | 49.4 | 42 | 44.11 % | 49 | 50.97 % |
MRK | 97 | 51.9 | 39 | 40.21 % | 49 | 50.52 % |
Occurrences Statistics | 5 candlesticks testing period (FALSE efficiency) |
10 candlesticks testing period (FALSE efficiency) |
||||
---|---|---|---|---|---|---|
Symbol | Number of Occurrences |
Average Frequency |
Number of Occurrences |
% of Occurrences |
Number of Occurrences |
% of Occurrences |
MNST | 112 | 39.1 | 55 | 49.11 % | 55 | 49.11 % |
GMCR | 130 | 38.3 | 60 | 45.38 % | 60 | 45.38 % |
CELG | 110 | 45.8 | 51 | 46.36 % | 50 | 45.45 % |
SIG | 131 | 35.5 | 59 | 44.28 % | 57 | 42.75 % |
TSCO | 108 | 46.3 | 46 | 41.66 % | 46 | 41.66 % |
ADSK | 97 | 51.9 | 37 | 38.14 % | 37 | 38.14 % |
URI | 106 | 41.6 | 38 | 34.91 % | 38 | 34.91 % |
ESRX | 104 | 48.4 | 37 | 35.58 % | 37 | 35.58 % |
UNM | 100 | 50.3 | 35 | 34.00 % | 35 | 34.00 % |
CTXS | 98 | 50.2 | 35 | 35.71 % | 34 | 34.69 % |
Scanner settings: daily stocks
Group: S&P500
Number of symbols: 502
Date range: 7/1/2010 - 6/30/2015
Time interval: daily candles
Total number of candlesticks: 614,034
Number of occurrences (Bearish Strong Line): 12,613
Number of occurrences (all candlestick patterns): 166,328
% of occurrences (Bearish Strong Line): 7.58 %
Average frequency: 48.7
Efficiency statistics (5 candlesticks testing period)
Efficiency | NO DATA | FALSE | LOW | MEDIUM | HIGH |
---|---|---|---|---|---|
Number of Occurrences |
194 | 2,077 | 4,348 | 2,638 | 3,356 |
% of Occurrences |
1.54 % | 14.93 % | 34.47 % | 20.91 % | 28.15 % |
Efficiency | NO DATA | FALSE | LOW | MEDIUM | HIGH |
---|---|---|---|---|---|
Number of Occurrences |
225 | 1,921 | 3,593 | 2,366 | 4,508 |
% of Occurrences |
1.78 % | 13.45 % | 28.49 % | 18.76 % | 37.52 % |
Occurrences Statistics | 5 candlesticks testing period (HIGH efficiency) |
10 candlesticks testing period (HIGH efficiency) |
||||
---|---|---|---|---|---|---|
Symbol | Number of Occurrences |
Average Frequency |
Number of Occurrences |
% of Occurrences |
Number of Occurrences |
% of Occurrences |
FCX | 28 | 44.9 | 16 | 57.13 % | 20 | 71.43 % |
NFX | 31 | 40.6 | 20 | 64.52 % | 21 | 67.74 % |
RIG | 27 | 46.6 | 13 | 48.15 % | 18 | 66.68 % |
ZION | 27 | 46.6 | 13 | 48.15 % | 18 | 66.67 % |
AMAT | 26 | 48.4 | 11 | 42.31 % | 16 | 61.54 % |
NEM | 27 | 46.6 | 12 | 44.45 % | 16 | 59.26 % |
RRC | 27 | 46.6 | 13 | 48.15 % | 16 | 59.26 % |
FLR | 29 | 43.4 | 11 | 44.83 % | 15 | 58.63 % |
MU | 29 | 43.4 | 16 | 55.17 % | 17 | 58.62 % |
XEC | 29 | 43.4 | 15 | 51.73 % | 17 | 58.62 % |
Occurrences Statistics | 5 candlesticks testing period (FALSE efficiency) |
10 candlesticks testing period (FALSE efficiency) |
||||
---|---|---|---|---|---|---|
Symbol | Number of Occurrences |
Average Frequency |
Number of Occurrences |
% of Occurrences |
Number of Occurrences |
% of Occurrences |
MU | 29 | 43.4 | 9 | 31.03 % | 9 | 31.03 % |
FTR | 39 | 32.3 | 12 | 30.77 % | 12 | 30.77 % |
ECL | 30 | 41.9 | 9 | 26.67 % | 9 | 26.67 % |
HIG | 30 | 41.9 | 10 | 33.33 % | 9 | 30.00 % |
GNW | 31 | 40.6 | 9 | 29.03 % | 9 | 29.03 % |
IFF | 31 | 40.6 | 9 | 25.80 % | 9 | 25.80 % |
CSC | 28 | 44.9 | 8 | 28.57 % | 8 | 28.57 % |
DAL | 29 | 43.4 | 8 | 27.59 % | 8 | 27.59 % |
SWKS | 29 | 43.4 | 8 | 27.59 % | 8 | 27.59 % |
VMC | 29 | 43.4 | 8 | 24.14 % | 8 | 24.14 % |