UMBRELLA
Definition
This candlestick is a type of Doji characterized by having no upper shadow and a long lower shadow. It is also known as the Dragonfly Doji.
Recognition Criteria
1. The body length is either null or very close to null.
2. There is no upper shadow.
3. The lower shadow is long.
Candlestick Requirements and Flexibility
Ideally, the body should be colorless and have zero length. However, candlesticks with close-to-zero body lengths and white or black body colors are also acceptable. Only the lower shadow exists, and it is long.
Trader’s Behavior
The Umbrella indicates that sellers predominantly controlled trading during the day, driving prices lower. However, buyers resurfaced towards the end of the day, successfully pushing prices back to the opening level and to the day’s high.
The Umbrella has the potential to signal a bullish reversal at the bottom if it appears after a long downtrend, a long black candlestick, or if it is seen at a support level. Similarly, the Umbrella may signal a bearish reversal at the top if it appears after a long uptrend, a long white candlestick, or if it is seen at a resistance level. In both situations, bearish or bullish confirmation is required.