The Bottoming Tail Reversal Candlestick Pattern

The bottoming tail is a candlestick pattern you should learn if you want to spot bottoms in stocks. When a bottoming tail appears, it often marks the end of a move and a fresh rally will soon follow after that. The longer the tail, the more powerful the reversal signal will be.

bottoming tail

The bottoming tail can come in many different variations. Some have bodies and some do not have bodies. But the message that they give is very clear, the stock has at one point gone very low but it rejected going lower and shot back up to close near the highs of the day. Bottoming tails have one thing in common. They all have very long tails.

In the chart above, you can see ADBE formed a bottoming tail at its 200 MA. This is a very powerful combination because it told us that there were people who were buying the stock at the 200 MA. Watch how the bottoming tail marked the end of the downward move. ADBE shot up higher very fast in the next few days.

The chart of Sprint above shows another classic example of how a bottoming tail can end a correction. After the bottoming tail appeared, the stock rallied and gave traders a very good trading opportunity.

Bottoming Tails Works Very Well In Long Term Charts

The bottoming tail works very well in longer term charts to show us a major reversal in stocks. It also works very powerfully in indexes such as the S&P 500.

In the chart above, you can see how time and time again the bottoming tail marked a bottom in the S&P 500. When you see a bottoming tail form in the S&P 500 after a bearish move, it gives you a very good signal to buy the market.

In the chart above, the bottoming tail gave two very good reversal signals in the weekly chart of CBS. Both of them gave us a great opportunity to buy the stock.

  • If you like this article, consider starting the Stock Market Course. It is free and jam packed with great information for newbies.
  • Want to have updates on the financial markets? Join my Telegram Channel. Dstockmarket.com Channel.
  • Help support this page and press the Facebook Like button below. Thanks!

Recent Articles

  1. Technical Analysis Lessons From OKA Corp Stock Chart

    Aug 17, 18 05:07 AM

    In this lesson we will take a look at the technical developments of OKA Corp's stock price and why it moved the way it did. We will also have a look at what might happen to OKA's stock price.

    Read More

  2. Technical Analysis Lessons From BMY Stock Chart

    Aug 16, 18 07:28 AM

    In this lesson, we will learn how and why BMY manage to bottom out and start a new uptrend.

    Read More

  3. Technical Analysis Lessons From Pentamaster's Stock Chart

    Aug 14, 18 08:19 AM

    In this lesson we will learn and examine why Pentamaster was able to recover all of its losses to start a new uptrend and achieve new highs.

    Read More

  4. Technical Analysis Of KLCI August 13 2018

    Aug 13, 18 05:56 AM

    The KLCI is currently at resistance territory after a nice big rally. I would consider a sideways trading a possible scenario at the moment.

    Read More

  5. Technical Analysis Lessons From AAPL's 15 Min Stock Chart

    Aug 13, 18 05:22 AM

    In this lesson, we will learn how AAPL's 15 Min stock chart formation help to send the stock higher for 2-3 days to give traders a nice swing trading opportunity.

    Read More

New! Comments

Have your say about what you just read! Leave me a comment in the box below.