Stocks & Commodities V. 23:8 (62, 83): Charting The Market: Piercing Patterns by David Penn
Writing about dual candle lines in his book "Beyond
Candlesticks," Steve Nison recalls a particularly
vivid (and metaphoric) description of a “piercing
pattern” in Japanese candlestick analysis:
"… [T]he last of the bulls that were backed into
a corner and came out fighting in a heroic
fight. Kamikaze fights are always frightening,
so the bears seeing this take to the sidelines
for the moment. In this quiet period, the
bulls may get reinforcements, or after all the
selling that has occurred, the supply road for
the bears may be already broken."
Great action. But something in this eludes me when I think about piercing patterns. In looking at what happens in a piercing pattern, what I see is almost wholly a reaction to overreaching. I don’t see a “quiet period,” in which reinforcements gather like the colonists crossing the Delaware River on the night before Christmas to surprise the British troops during the American Revolution. No, piercing patterns remind me more of World War II’s Battle of Stalingrad.