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Michael C. Thomsett is a widely published options author. His "Getting Started in Options" (Wiley, 9th edition) has sold over 300,000 copies. He also is author of "Options Trading for the Conservative Investor" and "The Options Trading Body of Knowledge" (both FT Press); and "Options for... More
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  • Black Marubozu Candlesticks – In Several Varieties 0 comments
    Feb 12, 2014 8:58 AM

    In Japanese, "marubozu" means "with little hair." This is a reference to the expected small or non-existent upper or lower shadows on this candlestick.

    The black marubozu is one variety of a long black candlestick and may have small upper and lower shadows. However, these will be quite small compared to the non-marubozu long black candlestick, which may have much longer upper or lower shadows. The appearance of the black marubozu demonstrates this point:

    A long black candlestick is expected to have larger upper or lower shadows, so by definition a long black session with little or no shadows is a marubozu; and a black marubozu is bearish.

    A second variety is the black opening marubozu. This has only a lower shadow and no upper shadow:

    This often is seen within a current downtrend, and in that case the opening black marubozu is a continuation signal. A third version, the black closing marubozu, also works as a continuation signal in a downtrend, or a reversal at the top of an uptrend:

    All forms of black marubozu are clearly bullish as varieties of the long black candlestick. By "long," it means longer than the average preceding it, and the distinction is purely relative. Depending on the scaling of the char,t it could be a fraction of a point or many points. This is a visual test. As long as the sessions before are much shorter, it's a long candlestick.

    The marubozu is among the strongest of one-session indicators. For this reason, when you spot an unusually extended session, pay attention to it and to where it appears in the current trend. It may confirm other signals or act as a lead signal which then needs additional confirmation, of either reversal or continuation.

    To gain more perspective on insights to investing observations and specific analysis, I hope you will join me at where I publish many additional articles. I also maintain a virtual portfolio of stock at For new trades, I usually include a stock chart marked up with reversal and confirmation, and provide detailed explanations of my rationale. Link to the site to learn more.

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