INVERTED UMBRELLA
Definition
This candlestick is a type of Doji characterized by having no lower shadow and a long upper shadow. It is also known as the Gravestone Doji.
Recognition Criteria
1. The body length is either null or very close to null.
2. There is no lower shadow.
3. The upper shadow is long.
Candlestick Requirements and Flexibility
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 upper shadow exists, and it is long.
Trader’s Behavior
The Inverted Umbrella indicates that buyers dominated trading, driving prices higher during the day. However, sellers resurfaced towards the end of the day, pushing prices back to the opening level and to the day’s low.
The Inverted Umbrella has the potential to indicate buying pressure and suggest a potential bullish reversal if it appears after a long downtrend, a long black candlestick, or at a support level. Conversely, it may signify a failed rally and indicate a potential bearish reversal if it appears after a long uptrend, a long white candlestick, or at a resistance level. Bearish or bullish confirmation is required in both situations.