CANDLE STICKS

A candlestick is a type of price chart used in technical analysis that

displays the high, low, open, and closing prices of a security for a specific
period. It originated from Japanese rice merchants and traders to track
market prices and daily momentum hundreds of years before becoming
popularized in the United States. The wide part of the candlestick is called
the "real body" and tells investors whether the closing price was higher or
lower than the opening price (black/red if the stock closed lower,
white/green if the stock closed higher).

SHADO
W

BODY

Discussing few basic patterns :-

1. HAMMER
2. SHOOTING STAR
3. BULLISH ENGULFING
4. BEARISH ENGULFING
HAMMER
A hammer is a price pattern in candlestick charting that occurs when a
security trades significantly lower than its opening, but rallies within the
period to close near opening price. This pattern forms a hammer-shaped
candlestick, in which the lower shadow is at least twice the size of the real
body. The body of the candlestick represents the difference between the
open and closing prices, while the shadow shows the high and low prices
for the period.

The candlestick's shadows show the day's high and low and how they
compare to the open and close. A candlestick's shape varies based on the
relationship between the day's high, low, opening and closing prices.
Candlesticks reflect the impact of investor sentiment on security prices and
are used by technical analysts to determine when to enter and exit trades.
Candlestick charting is based on a technique developed in Japan in the
1700s for tracking the price of rice. Candlesticks are a suitable technique
for trading any liquid financial asset such as stocks, foreign exchange and
futures.
HAMMER IN AXIS BANK
SHOOTING STAR

A shooting star is a bearish candlestick with a long upper shadow, little or

no lower shadow, and a small real body near the low of the day. It appears
after an uptrend. Said differently, a shooting star is a type of candlestick
that forms when a security opens, advances significantly, but then closes
the day near the open again.

For a candlestick to be considered a shooting star, the formation must

appear during a price advance. Also, the distance between the highest price
of the day and the opening price must be more than twice as large as the
shooting star's body. There should be little to no shadow below the real
body
SHOOTING STAR IN TATA ELXSI

BULLISH ENGULFING
A bullish engulfing pattern is a white candlestick that closes higher than the
previous day's opening after opening lower than the previous day's close. It
can be identified when a small black candlestick, showing a bearish trend,
is followed the next day by a large white candlestick, showing a bullish
trend, the body of which completely overlaps or engulfs the body of the
previous day’s candlestick.

The bullish engulfing pattern is a two-candle reversal pattern. The second

candle completely ‘engulfs’ the real body of the first one, without regard to
the length of the tail shadows. This pattern appears in a downtrend and is a
combination of one dark candle followed by a larger hollow candle. On the
second day of the pattern, the price opens lower than the previous low, yet
buying pressure pushes the price up to a higher level than the previous
high, culminating in an obvious win for the buyers
BULLISH ENGULFING IN TCS

BEARISH ENGULFING
A bearish engulfing pattern is a technical chart pattern that signals lower
prices to come. The pattern consists of an up (white or green) candlestick
followed by a large down (black or red) candlestick that eclipses or
"engulfs" the smaller up candle. The pattern can be important because it
shows sellers have overtaken the buyers and are pushing the price more
aggressively down (down candle) than the buyers were able to push it up
(up candle).

Ideally, both candles are of substantial size relative to the price bars around
them. Two very small bars may create an engulfing pattern, but it is far less
significant than if both candles are large.The real body—the difference
between the open and close price—of the candlesticks is what matters. The
real body of the down candle must engulf the up candle and moreover the
pattern has far less significance in choppy markets
BEARISH ENGULFING IN AMARA RAJA BATTERIES
 PRATHAMJOT SINGH
SGTB KHALSA COLLEGE
INTERN CODE- FI-21055