Type of Candlestick Patter Part- 3
Long-Legged Doji (juji)
The Long-Legged Doji has long upper and lower shadows in the middle
of the day’s trading range, clearly reflecting the indecision of buyers
and sellers (Figure 2-8). Throughout the day the market moved
higher and then sharply lower, or vice versa. It then closed at or very
near the opening price. If the opening and closing are in the center of
the day’s range, the line is referred to as a Long-Legged Doji. Juji
Gravestone Doji (tohba)
The Gravestone Doji (hakaishi), shown in Figure 2-9, is another form
of a Doji day. It develops when the Doji is at, or very near, the low of
The Gravestone Doji, like many of the Japanese terms, is based on
various analogies. In this case, the Gravestone Doji represents the
graves of those who have died in battle.
If the upper shadow is quite long, it means that the Gravestone
Doji is much more bearish. Prices open and trade higher all day
only to close where they opened, which is also the low price for the
day. This cannot possibly be interpreted as anything but a failure to
rally. The Gravestone Doji at a market top is a specific version of a
Shooting Star . The only difference is the that the Shooting
Star has a small body and the Gravestone Doji, being a Doji, has
no body. Some Japanese sources claim that the Gravestone Doji can
occur only on the ground, not in the air. This means it can be a bullish indication on the ground or at a market low, not as good as a
bearish one. It certainly portrays a sense of indecision and a possible
change in trend.
Dragonfly Doji (tonbo)
The Dragonfly Doji, or Tonbo (pronounced Tombo), occurs when
the open and close are at the high of the day (Figure 2-10). Like other
Doji days, this one normally appears at market turning points. You
will see in later chapters that this Doji is a special case of the Hanging
Man and Hammer lines. A Tonbo line with a very long lower
shadow (tail) (shitahigi) is also called a Takuri line. A Takuri line at
the end of a down trend is extremely bullish.
Four Price Doji
This rare Doji line occurs when all four price components are equal.
That is, the open, high, low, and close are the same (Figure 2-11).
This line could occur when a stock is very illiquid or the data source
did not have any prices other than the close. Futures traders should
not confuse this with a limit move. It is so rare that one should suspect
data errors. However, it does represent complete and total
uncertainty by traders in market direction.
A Star appears whenever a small body gaps above or below the previous
day’s long body (Figure 2-12). Ideally, the gap should encompass
the shadows, but this is not always necessary. A Star indicates
some uncertainty in the marketplace. Stars are part of many candle
patterns, primarily reversal patterns.
PAPER UMBRELLA (KARAKASA)
Many of these lines are also included in the next chapter on candle patterns.
Like the previously mentioned candle lines, the Umbrella lines
have strong reversal implications. There is strong similarity between the
Dragonfly Doji and this candle line. Two of the Umbrella lines are
called the Hammer and Hanging Man, depending upon their location
in the trend of the market.