Japanese candlesticks - Counterattack lines
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Bullish counterattack line
Definition: A bullish counterattack line structure is comprised of two Japanese candlesticks. The first is a large bearish candlestick (red) followed by another large bullish candlestick (green) which opens on a bearish gap and closes at the same closing point as the first candlestick.
Illustration:
Characteristic: A bullish counterattack line often forms after a significant drop characterized by several large red Japanese candlesticks.
Significance: A bullish counterattack line is a reversal pattern, it indicates a bullish trend reversal. This reflects exhaustion of bearish forces following the bearish gap and then a buyers’ takeover.
Note: It is important that both candlesticks are large, especially the first one. As for the closing of the candlesticks, they must occur at the same level.
Invalidation: If the next candlestick is not bullish or does not open onto a bullish gap, the bullish counterattack line structure is invalidated.
Bearish counterattack line
Definition: A bearish counterattack structure is comprised of two Japanese candlesticks. The first is a large bullish candlestick (green) followed by another large bearish candlestick (red) which opens on a bullish gap and closes at the same level as the first candlestick.
Illustration:
Characteristic: A bearish counterattack structure often forms after a significant rise characterized by several large green Japanese candlesticks.
Significance: A bearish counterattack structure is a reversal pattern, it indicates a reversal of the bearish trend. This reflects exhaustion of bullish forces following the bullish gap and then a sellers’ takeover.
Note: It is important that both candlesticks are large, especially the first one. As for the closing of the candlesticks, they must occur at the same level.
Invalidation: If the next candlestick is not bearish or does not open onto a bearish gap, the bearish counterattack line structure is invalidated.
