In the science of chart reading, there are multiple patterns that traders use to try and predict stock movements. A powerful pattern that is used by many traders is the kicker candlestick pattern. It gives clear signals that the market is likely to reverse.
Here we will look at what a kicker candlestick pattern is, why it matters, and how to interpret it.
A kicker chart pattern is a rare but powerful pattern that signals the likelihood of a sharp reversal as it highlights a complete shift in market sentiment. It is made up of two candles. The pattern forms when there is a dramatic change in direction between the two successive candles, implying that the market players have drastically altered their perspective either from being bullish to bearish or vice versa.
On day 1, the first candle shows up in the direction of the trend, but the candle on day 2 opens at, or beyond, the close of the first candle against the previous trend and strongly in the opposite direction. Generally, this pattern appears when there is a fundamental change in the company – say an acquisition or earnings announcement, etc.
There are two types of kicker candlestick patterns: bullish kicker and bearish kicker. Here are the major differences between bullish kicker candlestick pattern and bearish kicker candlestick pattern:
Bullish Kicker vs Bearish Kicker |
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Bullish Kicker Candlestick Pattern |
Bearish Kicker Candlestick Pattern |
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This pattern occurs when the market is in a downtrend. |
This happens when an uptrend is in place, and the opening candle is bullish. |
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The first candle within the pattern is a bearish one. However, a second candle opens higher and reverses the downtrend, showing that the bulls have taken control. |
The second candle opens sharply lower and closes deep in the red, a sign that the bears are now in control. |
Check Here to know How to Read Candlestick Charts.
Interpretation of the kicker candlestick pattern is rather simple, but like in any pattern, you should keep in mind the context in which it is formed.
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Bullish Pattern |
Features |
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A reversal pattern which consists of: - A small bearish candle followed by a - Larger bullish candle. |
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A reversal pattern which consists of: - A small body candle, and - Long lower shadow/wick |
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A reversal pattern which consists of: - It starts with a long bearish candle - Followed by a small-bodied candle (either bullish or bearish) - And ends with a long bullish candle. |
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- A strong bearish candle followed by a bullish candle. - Second candle opens below the previous candle's close but closes above the midpoint (50%) of the previous bearish candle. |
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- It is is a two-candlestick pattern that signals a possible upward trend reversal. - Small bullish candle is completely contained within the body of the previous large bearish candle. |
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- It consists of three long bullish candles with small wicks that appear consecutively one after another. - Each new candle opens inside the previous one’s body and closes higher than the last. |
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A reversal pattern which: - Appears at the bottom of a downtrend - A small body with a long upper shadow and little to no lower shadow. |
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A reversal pattern which consists of: - A single candlestick pattern - A very small body and a long lower shadow that appears at the bottom of a downtrend |
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- It consists of a long bearish candle - Followed by a doji candle that gaps down - And then a long bullish candle that gaps up. |
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A three candlestick pattern with: - A large bearish candle, - A small bullish candle that closes above the 50% level of the first candle and - A third bullish candle that closes above the first candle's open. |
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Starts with a bearish candle - Followed by a bullish candle that engulfs the first candle - Ends with another bullish candle that closes higher. |
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A two-candlestick pattern that includes: - Two equal-sized bullish and bearish candles. |
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It consists of five candles in a continuation pattern - A long bullish candle - Three small bearish candles that trade above the low and below the high of the first candlestick - And another long bullish candle that closes above the high of the first candlestick. |
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It is similar to the rising three methods pattern consisting of five candles - It starts with a long bullish candle - Followed by three small bearish candles (a smaller bearish candles that move lower) that stay within the range of the first candle - And end with another long bullish candle that closes above the high of the first candle. |
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Bearish Pattern |
Features |
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It forms when a small bullish candle is followed by a large bearish candle that completely engulfs the previous green candle |
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It is formed when three consecutive long-red candles with small wicks are visible |
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It appears at the top of the uptrend as a single candle with a small body and a long lower shadow |
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It is a three-candlestick pattern that - Starts with a long bullish candle - Followed by a small-bodied candle that gaps up - And ends with a long bearish candle that closes well into the body of the first candle |
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It is a reversal strategy which: - Is a single candlestick pattern with a small body, a long upper shadow, and little to no lower shadow |
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It is a two-candlestick pattern that: - Starts with a long bullish candle followed by a Doji (a candle with a very small body) |
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It is a two-candlestick pattern where: - A small bearish candle is completely engulfed within the body of the previous large bullish candle |
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- It consists of two or more candles with matching highs and appears at the top of an uptrend. - The first candle is usually bullish - And the second candle is bearish |
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It is a three-candlestick pattern that: - Starts with a bullish candle - Followed by a smaller bearish candle that is completely within the first candle - And ends with another bearish candle that closes lower |
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It is a three-candlestick pattern that - Starts with a bullish candle - Followed by a bearish candle that engulfs the first candle - And ends with another bearish candle that closes lower |
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it is a five-candlestick pattern that: - Starts with a long bearish candle - Followed by three smaller bullish candles that stay within the range of the first candle - And ends with another long bearish candle that closes below the first candle |
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It forms a long green candle followed by a red candle that opens above the previous high but closes below the midpoint of the green candle. |
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It is a three-candlestick pattern that - Starts with a long bullish candle - Followed by a Doji that gaps up from the previous candle - And ends with a long bearish candle that gaps down from the Doji. |