Takuri Line

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Figure 1. Takuri Line pattern.

Japanese name: takuri
Forecast: bullish reversal
Trend prior to the pattern: downtrend
Opposite pattern: Hanging Man

Construction:

• white or black candle with a small body
• no upper shadow or the shadow cannot be longer than the body
• lower shadow at least three times longer than the body
• if the gap is created at the opening or at the closing, it makes the signal stronger
• appears as a long line

The Takuri Line pattern is very similar to Hammer. The only difference is that Hammer's lower shadow length cannot exceed more than twice its body length, whereas Takuri Line's lower shadow cannot be shorter than at least three times its body.

The Takuri Line is more reliable when is formed in a clear downtrend, or within a support zone. An occurrence of Takuri Line pattern after the short-term declines usually does not matter. Very important is its market context. In the algorithm implemented within CandleScanner, we used some constraint in which the candle is recognized as a valid pattern only when the body is fully located under the trend line.

Takuri Line pattern appearing after the price gap should be seen as a stronger signal, but as with every one-line pattern, it is good to wait for the signal confirmation in the subsequent candles. However, aggressive traders often take the position immediately after the opening of the next candle with the gap, as it gives the opportunity for a dynamic price movement upwards.

Takuri in Japanese denotes bottom fishing which is a fishing techniques, used to catch fish that are found near the sea floor.

Figure 2. Figure presents the example demonstrating importance of the market context in which a pattern occurred. We can notice a downtrend lasting for more than three weeks. Every occurrence of the Black Candle forms a resistance zone.
Takuri Line pattern is formed (at a trading volume higher than the average) as a part of the Three Inside Up pattern. Both patterns are bullish, however previously mentioned resistance zones are hard to conquer.
On the following day since the appearance of the Takuri Line, the market opens with the price gap, exactly on the level of the trendline, creating a support zone. In theory, the pattern is confirmed, but we can see that the resistance zone formed by Black Candles is quite powerful.

Figure 3. The occurrence of Takuri Line pattern in the area of strong resistance zone that was formed by the Long Black Candle. Resistance zone is confirmed by a high trading volume.

Takuri Line statistics

Below you can find some Takuri Line pattern statistics calculated by CandleScanner software. To see more detailed statistics, for other markets and periodicity try our CandleScanner software. Prices start at only $10, and you can see more detailed statistics, for other markets and periodicity. Click here to find out more!