Red Opening Marubozu

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

Recognition Criteria

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

2. There is no upper shadow.

Candlestick Requirements and Flexibility

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

Trader’s Behavior

A Red Opening Marubozu indicates that the sellers controlled the price action from the first trade to the last trade. The day opens and prices continue to go down all day long without looking back, thus forming a long red day with no upper shadow. However, the day does not close at the low, and thus creates a lower shadow.

This candlestick is generally bearish. However, its position within the broader technical picture is also important. It may show a potential turning point and suggest that prices have reached to a resistance level after an extended rally (Bearish Belt Hold Pattern). 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.