| Dragonfly Doji |
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Pattern: reversal
Reliability: low/moderate
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Identification
A Doji forms at the upper end of a trading range with a long lower shadow (the longer the more bearish) with no, or almost no upper shadow.
The Psychology
In an uptrend or within a bounce of a downtrend, a sharp intraday sell-off is followed by a reversal which causes the stock to close at its opening price near the day's high. Although the stock recovers from its intraday sell-off, it suggests the bulls are starting to lose strength, and a reversal may occur. A weak following day on solid volume is still needed to confirm the pattern.
The bearish Dragonfly Doji is similar to the bearish Hanging Man, bullish Dragonfly Doji, and bullish Hammer. |
