Are you one of those nervous traders always looking for signals of a turnaround? If so, the bullish squeeze alert candlestick is one pattern that you should always keep an eye out for. This pattern occurs in a decidedly bear market. The first day is a continuation of this trend, with a long black candlestick body. The second day may be any color so long as it is completely contained within the body of the first day. The third day follows suit; again, the color is not so important as the fact that the market is unable to trade outside of pretty narrow confines.
Regardless of their color, these candles form a triangle, which many of you might recognize from Trading 101 as a shape suggesting volatility. In this case, the triangle is suggesting a bullish turnaround. Think of the market as a spring; the candlesticks are getting smaller and smaller before springing up in the opposite direction. As the triangular shape might suggest, the bullish squeeze alert candlestick pattern is an indicator of a fast and hard turnaround.
Your Next Move
If at all possible, your next move should be to buy. If you are looking to get in on a market at its very lowest point, the bullish squeeze alert candlestick pattern offers you a chance. The triangle suggests that the market is about to make a steep upward ascent. However, because nothing is guaranteed in the stock market, you should always wait for confirmation on the fourth trading day.
Confirmation
Confirmation of the bullish squeeze alert candlestick pattern could consist of any kind of upward movement, whether it is a gap up, a high closing price, or any kind of white candlestick. Another type of confirmation, however rare, would be further squeezing action, such as a doji on the fourth day.
Variations of This Pattern
Because the color of the last two days is not prescribed, there are several variations on this pattern. However, don’t let the color throw you off; as long as there is a general downtrend along with a long black day at the beginning followed by that tell-tale triangular shape, you can confidently assume that you are seeing the bullish squeeze alert candlestick pattern.
Similar Patterns
The bullish squeeze alert is similar to the bearish squeeze alert, except for the placement and the meaning. While both have the volatile triangular shape, the bearish squeeze alert candlestick pattern is different because it occurs during a bull market and begins with a long white candlestick. However, both are moderately strong indications of a turnaround.
Are you always looking for the next big thing? Do you relish the feeling (and the profit) of getting in on the ground floor of a great deal? If so, you should be thrilled to see the bullish squeeze alert candlestick pattern. This formation is a sign of great things to come, and traders that recognize it can see it coming in time to get in on the action.
