9. White Lower Shadow
-Definition: This candle’s close is greater than the open during an average or small daily range. The close must be equal to the high. The length of its real body must be larger than the length of its lower shadow.
■ Interpretation: It is a bullish candle as the close is greater than the open, and the close is at the high. It is likely to be a continuation pattern as the bulls are still in control. This candle’s bullishness will only be threatened if there is a close below its low on the next day
10. White Upper Shadow
Definition: This candle’s close is greater than the open during an average or small daily range. The open must be equal to the low. The length of its real body must be larger than the length of its upper shadow.
■ Interpretation: It is a bullish candle as the close is greater than the open although the close is off the high. Though the bulls are still in control, there is some profit taking at the close. As such, this candle is less bullish than the White Lower Shadow Candle. despite its close off the high, it is still considered a bullish day and is a likely continuation pattern unless confirmed by a close below its low (which is also the open).
When a Long White Candle Breaks Resistance . A long white candle reflects extreme power and strength behind the move. Found after a series of small candles at a low price area, it is a strong signal of a breakout on the upside. Relatively higher volume accompanying this long white candle will confirm that the breakout is genuine and implies that bigger players are ready to buy this stock further up
Long White Candle Seen at a Low Price Area. Long white candles seen at a low price area represent bulls attempting to take control. But it may take some time for bulls to garner enough strength to absorb stale bull liquidations before lifting themselves out of the sideways trend. Ideally, oscillators like the relative strength index (RSI) should be at oversold levels, and volume registered on white candles should exceed volume on black candles (see Figure 2.5). Proper action: Look for a breakout on the upside for a buy signal. Stronger volume registered on the breakout day is proof of bull intentions to drive prices higher.