BLACK CLOSING MARUBOZU
Definition
This candlestick represents extreme bearishness and is characterized by a long black body with an upper shadow but no lower shadow.
Recognition Criteria
1. The candlestick has a long black body.
2. The candlestick has no lower shadow.
Candlestick Requirements and Flexibility
The candlestick’s black body should be longer compared 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. The day opens, and prices go slightly higher, forming an upper shadow. Prices then reverse direction, moving below the opening level, and the decline continues throughout the day, ending with a closing price equal to the low of the day. The bears remain very strong during the day, except during the initial phase of the session.
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.