Piercing Line Candlestick Pattern

What the Piercing Line pattern means

The green candle opening lower then closing deep into the prior red body shows sellers were trapped and buyers took control intraday. The further the green candle closes into the red body, the more bullish the signal. It is the bullish mirror of dark cloud cover.

How the Piercing Line is traded

• →Look for the green candle to close above the midpoint of the prior red body.
• →Confirm with a higher close the following period before entering long.
• →Stop goes below the low of the two-candle pattern.
• →Stronger at support and on higher volume.

Common mistakes

• ✕Trading it when the green candle fails to close past the midpoint.
• ✕Confusing it with a bullish engulfing, which fully engulfs the prior body.