MATCHING LOW
Description
The
Matching Low
pattern is similar to the Homing Pigeon patter, the exception being that the two
days of the pattern close on their lows, at the same level. After a long downtrend, recognizing that the
price has closed at the same level without going through is an indication to the bears that the bottom
has been hit.
Criteria
1.
The body of the first candle is black; the blody of the second candle is black.
2.
The downtrend has been evident for a good period. A long black candles occurs at the end of the
trend.
3.
The second day opens higher than the close of hte previous day and closes at the same close as
the prior day.
4.
For a reversal signal, further confirmation is required to indicate that the trend is moving up.
Pattern Psychology
After a strong downtrend has been in effect
and after a long black candle,
the bulls open the price
higher than the previous close. The shorts get concerned and start covering. However, the bears sitll
have enough control to close the price at the low of the day, the low being the same as the close of
the previous day. The psychological impact for hte bears is that it couldn't close
below the previous
close, thus causing concern that this is a support level.
