Updated on March 6, 2023
Black Marubozu is a single candle pattern in candlestick charting that is used to signal a strong bearish sentiment in a security or market. The pattern is formed when a security opens at its high for the period and closes at its low, with little or no wicks (shadows) on either end of the candle. The longer the black candle and the lower the close relative to the open, the more bearish the signal.
What does the Black Marubozu indicate?
The Black Marubozu indicates that bears (sellers) were in control throughout the entire period, pushing prices lower and closing at the low. This pattern is generally considered to be a bearish reversal pattern and is most effective when it occurs after an uptrend.
Can black marubozu be used as a standalone indicator?
No, the Black Marubozu is not typically used as a standalone indicator in technical analysis. It is just one of many technical tools used in making investment decisions and should be used in conjunction with other analysis methods such as fundamental analysis, market sentiment, and other technical indicators. The Black Marubozu can provide important information about market trends and sentiment, but it is important to keep in mind that the markets can be influenced by many factors, and it is important to consider multiple sources of information and analysis before making any investment decisions.