The Marabozu candlestick pattern is one of the most basic patterns to identify and learn on any chart, and it is one of the strongest candlesticks as well. It is a single long candlestick that will be either bullish or bearish in nature. If it is bullish, the candlestick will be white or green in color, which means the period opened at a low position and closed at a higher price point. If it is bearish, the candlestick will be black or red in color, which means the period opened at a high price point and closed at a lower position.
Both versions of the Marabozu candlestick will be missing both an upper wick and a lower wick. For a Bullish Marabozu, this means the buyers were entirely in control over the course of the trading period. For the Bearish Marabozu, it means the sellers were completely in control. In short, a Marabozu candlestick is simple to spot and strong in its signal to the marketplace.
A Marabozu candlestick will be found just about anywhere on a stock chart.
Usually, it is best to wait for the next period’s candle to see if the trend is continuing or in a reversal. For example, if a Bullish Marabozu appears during an upward trend, it is a signal the trend will continue. However, if a Bullish Marabozu appears during a downward trend, it can be a sign the trend will reverse. The same could be said of a Bearish Marabozu; if it appears during a downward trend, it is a strong signal the trend will continue, but if it appears during an upward trend, there is a good chance of a reversal. Again, it is a good idea to see which way the market moves on the next period candle before making a trading decision.