Red Closing Marubozu

This candlestick represents extreme bearishness and it is characterized with a long black body that has an upper shadow but no lower shadow.

Recognition Criteria

1. The body of the candlestick is black and long.

2. There is no lower shadow.

Candlestick Requirements and Flexibility

The black body of the candlestick should be longer relative to the other candlesticks on the chart. It has a shadow on the opening side but no shadow on the closing side.

Trader’s Behavior

A Black Closing Marubozu indicates that sellers controlled the price action from the first trade to the last trade. The day opens and prices go slightly higher, forming an upper shadow. Then prices reverse direction moving below the opening level, and the decline continues all day ending with a closing price equal to the low of the day. The bears are very strong during the day except during the initial phase of the session.

The candlestick is generally bearish. However, its position within the broader technical picture is also important. It may show a potential turning point and that prices have reached a resistance level after an extended rally. If it is seen after a long decline, it may signal panic or capitulation, a final sell off attempt before bulls regain control. Still, the candlestick alone is not reliable enough to decide the direction of the markets, since it reflects only one day’s trading.