Chart Analysis – Marubozu

In Japanese, Marubozu means close cropped or close-cut and this candlestick pattern has no upper shadow and no lower shadow. The real body of this pattern could be short or long as well as black or white. Its meaning reflects the fact that there are no shadows extending from either end of the body and it exhibits a strong trend within a specific amount of time. Bald or Shaven Head are more commonly used in candlestick chart analysis. During chart analysis using candlestick charts, the marubozu is more relevant when it occurs at a breakout point and it can also occur anywhere on a chart.

As stated above, the marubozu can be a white or black candlestick and it indicates trending markets that are created when supply and demand rules the market. Again, the marubozu may appear at any time when candlestick charting, however due to the nature of this candlestick, the marubozu provides more meaning when occurring at the breakout. During chart analysis, The black marubozu candlestick is formed as a long black body that is strong during a downtrend and indicates that supply is more than demand while the white marubozu candlestick is formed as a long white body that is strong during an uptrend and indicates demand is more than supply.

The psychology built into a major candlestick signal is simple common sense investment philosophy. When you learn how to utilize the candlestick signals correctly during chart analysis you now have the knowledge to improve your trading techniques for those trading entities you want to trade. You do not have to depend on canned programs that sometimes work and sometimes don’t work and you do not have to buy or sell stock recommendations blindly based on a research analyst’s recommendations.

The candlestick signals provide guidance as to what investors are actually doing at a certain point in time. Learn the 12 major candlestick patterns as well as the secondary patterns and your investments perceptions will greatly improve.

Continue to learn about candlestick signals and chart analysis and read about the Dark Cloud Cover.