Skip to main content

Candlestick Pattern : The Marubozu

Introduction

Marubozu is a candlestick which has no upper and lower shadow. A Marubuzo has only the real body as you can see in the picture below. After reading this post you will be able to identify this pattern in any chart and make trading decisions accordingly.marubozu

There are two types of Marubozu  candlesticks :

  • Bullish (Green)
  • Bearish (Red)

Basically Marubozu implies dominance , so in whichever time-frame this candle appears , if it is green it shows that buyers have completely dominated that session and if it is red it shows that sellers have completely dominated that session.

The body of this candle must be long and must have almost no shadows.

INterpretation of marubozu

Now coming to the most essential part of it that is interpretation of this candlestick pattern :

  • If you find a bullish marubozu after a downtrend , it means that the time has come for reversal of trend. The downtrend has come to an end and the buyers are now ready to buy the stock.
  • If you find a bearish marubozu after a downtrend , it means that it will be a continuation of trend.
  • Similarly , if you find a bullish marubozu after a uptrend ,it means that it will be a continuation of trend.
  • If you find a bearish one after a uptrend , it means that the time has come for reversal of trend. The uptrend has come to an end and the sellers are now ready to sell the stock.

This example will clear everything for you.

In the chart below (Asian Paints Daily Chart) , you can see a clear downtrend preceding the Bullish Marubozu , hence you expect a reversal of trend from next day and this is what happens.

example marubozu

 

Important Points :

  • The trend can be confirmed by waiting for one more session after this candle occurs in the chart and seeing the trend. If you are expecting a reversal and the in the next session the trend does not reverse then you need not enter the trade.
  • Simply avoid trading during a very small (< 1% range) or long candle (> 10% range)

 

Never miss any update related to the Indian Stock Market. Like StockFetcher on Facebook.

You can join the premium channel of Stocks Fetcher to make the best returns from the Indian Stock Market. You can read the details about it from here – StocksFetcher Premium

Can’t decide whether to invest in the upcoming IPO or not – Read All the IPO Reviews here

To quickly get a Brokerage Free Trading Cum Demat Account fill the form here – Zerodha

3 thoughts to “Candlestick Pattern : The Marubozu”

    1. In Bullish Marubuzo:
      1 (high-close)/close For Upper Shadow
      2 (low-open)/open For Lower Shadow
      In Bearish Marubuzo:
      3 (low-close)/close For Lower Shadow
      4 (high-open)/open For Upper shadow
      If above percentages are in between 0.2% to 0.3%
      It means that the pattern is significant else you can simply ignore it.

Leave a Reply

Your email address will not be published. Required fields are marked *