BLACK MARUBOZU
Definition
This candlestick represents extreme bearishness and is characterized by a long black body with no shadows on either end.
Recognition Criteria
1. The candlestick has a long black body.
2. The candlestick has no upper or lower shadows.
Candlestick Requirements and Flexibility
The candlestick’s black body should be longer compared to the other candlesticks on the chart, and it should have no shadows.
Trader’s Behavior
A Black Marubozu forms when the opening price is equal to the high of the day, and the closing price is equal to the low of the day. This demonstrates that sellers controlled the price action from the first trade to the last. The day opens, and prices continue to decline throughout the day without interruption, forming a long black candlestick with no upper shadow. The day also closes at the low of the day with no lower shadow.
This candlestick is generally bearish. However, its position within the broader technical context is also crucial. It may indicate a potential turning point, suggesting that prices have reached a resistance level after an extended rally. If observed after a prolonged decline, it may signal panic or capitulation, representing a final sell-off attempt before bulls regain control. Nonetheless, the candlestick alone is insufficient to determine market direction, as it reflects only one day of trading.