Candlestick are the key component of the Stock market world, and one of them is Bullish Candlestick which is formed when the current downtrend is near to end, indicating that the ongoing trend is going to be over and the market may move higher from here.

Otherwise, if these candlesticks form during an ongoing bullish trend, then these candlesticks will just act like a Continuation pattern, and the market will continue its rally further.

Before we move further,

Also Read: Best Stock Screener for Intraday Trading

How to Read the Candlestick Chart,

Candlestick can be used to determine the situation of a particular security, which tells a lot about any security in detail. Each candlestick represents a single period of data whether it could be one minute, hour, day, week, or month (based on your selected criteria).

Candlestick tells us four pieces of information, which include, the opening price, the closing price, the high price, and the Low price. The color Green suggests a positive market, while red suggests a Negative market, and the area that a color covers in a candlestick is called the body, while the left alone sticks come out of the candle is known as Wick or Shadow, which indicates the fight between Buyer and Seller.

Now,

Let’s dive deeper into Bullish Candlestick Patterns.

Here are the 9 Important Bullish Candlestick Patterns

1. Hammer Candlestick
2. Inverted Hammer
3. Bullish Engulfing
4. Piercing Line
5. Bullish Harami
6. Morning Star
7. Bullish Marubozu
8. Three White soldier
9. Tweezer Bottom
10. Bullish Belt Hold

Now, let’s start with Hammer Candlestick

01. Hammer Candlestick

Characteristics of a Hammer Candlestick

• Formation: At the bottom of the Trend
• Result: Bullish Reversal
• Potential Direction: Upward
• Confirmation: Sometimes a following Green Candle

Hammer Candlestick has a smaller upper body with a larger lower shadow/wick, as shown in the image above, where the lower shadow is at least twice larger than the real body of the candlestick.

It is formed at the bottom of a downtrend, where the candlestick indicates that the seller tried to pull the market lower but the security is already near or at the support level, and buying from the lower levels pushes back the market higher.

When this candlestick forms at the top of the trend, it is known as the Bearish Reversal Candlestick Pattern called Hanging Man.

The Candle body should be of any color either Red or Green but the Green body indicates a strong buying signal and the market is likely to rise the next day.

02. Inverted Hammer

Characteristics of an Inverted Hammer Candlestick

• Formation: At the bottom of the Trend
• Result: Bullish Reversal
• Potential Direction: Upward
• Confirmation: Not at all, but a following Green Candle is much better

An Inverted Hammer is a candlestick that can be found at the bottom of a downtrend, indicating that the current downtrend is near its end and the security will likely rise higher from here.

It consists of a Small lower body with a larger upper shadow/wick. But the wick should be at least twice the real body of the candlestick.

This indicates that the market opens lower but buyers push the market higher immediately, but sellers at the upper levels don’t let this happen and pull the lower but ultimately buyers were able to hold the market at the current level, indicating that the selling pressure was not strong enough to outrank the buyers.

That suggests the market will likely rise higher from here on the next day, but a following green candle is a better indication of a strong market.

03. Bullish Engulfing

Characteristics of Bullish Engulfing Candlestick

• Formation: At the bottom of the Trend / During a trend
• Result: Bullish
• Potential Direction: Upward
• Confirmation: Not at all

Bullish Engulfing Candlestick consists of two candlesticks, the first one is a short red candle and the second one is a Green Candle where the Green Candle completely engulfs the first red candle.

That indicates that the sellers tried to pull the market lower by opening the gap down, but buyers completely outnumbered the sellers because of heavy demand and completely pushed the candle higher than the red one – which indicates a complete win for the buyers – suggesting that the price will likely rise from here.

The Bullish Engulfing pattern can be found at the bottom of a downtrend which indicates a large number of new buyers enter the market and outnumber the sellers, by closing the candle higher than the previous one.

04. Piercing Line

Characteristics of Piercing Line Candlestick

• Formation: After a fall / During a Downtrend
• Result: Bullish Reversal
• Potential Direction: Upward
• Confirmation: The following Green Candle

The piercing Line Candlestick consists of two long candlesticks where the first candle is a red candle continuing the downtrend and the second one is a green candle that opens lower than the red candle but closes halfway above the red candle.

That indicates a significant buying after a long bear run, where the sellers try to pull the market lower but buyers push the market higher – as there a strong buying pressure from the lower levels closing the candle in green.

This candlestick also occurs during the end of a downtrend – suggesting that the market is now oversold, the bulls are ready to take over the market, and the price will likely rise higher from here.

05. Bullish Harami

Characteristics of Bullish Harami Candlestick

• Formation: At the bottom of the Trend
• Result: Bullish Reversal
• Potential Direction: Upward
• Confirmation: A Green Candlestick

Bullish Harami Candlestick consists of two candlesticks where the first one is a long red candlestick and the second one is a short green candlestick, which is contained within the previous red candle, indicating that that downtrend in the security is coming to an end, and likely there will be a bullish reversal from here.

This candle suggests that there is a strong fight between buyers and sellers but buyers outnumbered the sellers and managed to keep the market stable with a slight gain – suggesting a bullish reversal is likely from here.

06. Morning Star

Characteristics of Morning Star Candlestick

• Formation: During a Downtrend
• Result: Bullish Reversal
• Potential Direction: Upward
• Confirmation: Yes, A Bullish Candle

Morning Star consists of three candlesticks, where the first one is a long Red candle followed by a doji-type candlestick (green) which is again followed by a long Green candle.

That indicates that the sellers tried to continue the downtrend as they pulled the market lower and they were somewhere successful but Buyers entered at the lower levels and pushed the market higher, and because of the strong buying, the prices rose higher but sellers again pulled the market lower and managed to close the day at the opening levels with a slight gain.

The next green candlestick suggests that the buyers completely outnumbered the sellers by pushing the price higher than the previous red candlestick – suggesting a continuation of the current bullish trend.

07. Bullish Marubozu

Characteristics of a Bullish Marubozu Candlestick

• Formation: During an Uptrend, or at the bottom of the Trend
• Result: Bullish Continuation / Reversal
• Potential Direction: Upward
• Confirmation: A candle higher than this one

Bullish Marubozu is a single candlestick pattern with no shadow or wick at either the top or bottom indicating a complete dominance of Bulls.

This Candlestick can be formed anywhere on the chart and is a continuation pattern – which when formed indicates a continuation of the bullish trend in the price of the security.

08. Three White Soldier

Characteristics of Three White Soldier Candlestick

• Formation: After a Pullback from the bottom
• Result: Bullish Continuation
• Potential Direction: Upward
• Confirmation: Not needed at all

Three White Soldier Candlestick consists of three long bullish candles, which are typically formed after the end of a downtrend indicating a reversal in the price of the particular security.

After a strong downtrend, three long green candles form concurrently indicating a sharp shift in the momentum where the next candlestick opens within the body of the previous one, and closes higher than the previous green candle leaving No or a very small wick/shadow.

09. Tweezer Bottom

Characteristics of Tweezer Bottom Candlestick

• Formation: At the bottom of the Downtrend
• Result: Bullish Reversal
• Potential Direction: Upward
• Confirmation: Yes, the following Green Candle

Tweezer bottom is a bullish reversal candlestick pattern that formed during the end of a downtrend, consisting of two candlesticks with the same low, which means, both the Red and the next Green candles have the same lower price.

The first red candle indicates a strong selling pressure pulling the market lower, and as the second day starts, a strong buying at the beginning of the trade initiated by buyers that completely outnumbered the sellers (where the sellers are completely unable to pull the price lower) indicates a reversal in the price and the Trend too.

10. Bullish Belt Hold

Characteristics of a Bullish Belt Hold Candlestick

• Formation: Anywhere
• Result: Bullish
• Potential Direction: Upwards
• Confirmation: Require, a Following Green Candle higher than this one
• Drawback: Sometimes fails to shift the momentum

Bullish Belt Hold is a single candlestick pattern, which can be formed anywhere on the chart, indicating a strong buying in the particular security and a presence of more buyers than the sellers which immediately pushes the market higher immediately after the opening.

This candlestick contains of a larger green body, with NO lower shadow but an upper shadow, (otherwise it will be a Marubozu candlestick), suggesting a continuation of the bullish trend followed by this candle.

The Bottom Line

Candlestick charts are used to determine the market mood and to define the relation between the current and the upcoming trends. Traders and Investors use Candlestick patterns as a Technical Analysis Tool as these candlestick patterns provide an extra layer of Technical Analysis of a particular security besides the Technical and Fundamental Analysis.

In this article, we have looked at the Top 10 Bullish Candlestick Patterns which signals a potential buying/bullish opportunity in the market. All these 10 Bullish Candlestick patterns are the best when formed at the right place. So find these patterns on your trading chart, and predict the market like never before.