Japanese candlesticks - Dumpling top
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Dumpling top
Definition: A dumpling top structure is comprised of several Japanese candlesticks. The first candlesticks are bullish or bearish with a small body. This series of candlesticks should form a rounded top. Then, a last candlestick is formed with a bearish gap opening. This is the opposite of the frying pan bottom.
Illustration:
Characteristic: A dumpling top often forms after a significant increase characterized by several large green Japanese candlesticks.
Significance: A dumpling top is a reversal pattern, it indicates reversal of the bearish trend. This reflects a gradual exhaustion of buyers before the sellers forcefully regain control.
Note: A dumpling top is a major pattern in Japanese candlesticks. It is a powerful structure. However, it is essential not to anticipate its formation and to wait for the bearish gap.
Invalidation: If the bearish gap is filled on the last candlestick, the dumpling top structure is invalidated.
