| Homing Pigeon |
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Pattern: reversal
Reliability: moderate
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Identification
A long black day is followed by another black day which gaps opposite the
trend and is completely engulfed by the real body of the first day.
The Psychology
In a downtrend or within a pullback of an uptrend, a long black day occurs.
The next day’s gap up comes as a surprise to the shorts who thought
they were sitting on a great position the previous day, but the stock
gives some of its gap up back causing the candle to be filled in. This
relaxes the bears and worries the bulls, and this is the exact recipe
needed for a possible bounce. Confirmation is needed with a strong following
day on solid volume.
The bullish Homing Pigeon is similar to the bullish Harami and bullish
Matching Low.
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