The Ultimate Guide to Piercing Candlestick Patterns

Last updated: January 4, 2024

Piercing Pattern

After a strongly bearish candle, the next candle opens lower but pierces significantly into the body of the previous candle, signalling the potential for a bullish reversal:

Chart

General Identification & Interpretation

Steve Nison is credited with bringing Japanese candlestick charting to the West. In his book "Japanese Candlestick Charting Techniques" he describes piercing patterns with the following characteristics:

Typical characteristics

• First candlestick is a strong red candle
• Although the second candlestick opens lower, the price rises and pierces into the body of the first candle

Examples of use as a trading indicator

• Potential bullish reversal signal after a downtrend
• Support level near the lows of the piercing pattern

Other interpretations

• Typically, it is thought that the larger the degree of penetration into the body of the first candle, the stronger the potential for a reversal.
• If the second candle pierces halfway (or less) through the body of the first candle, there are other names (on-neck, in-neck, thrusting) associated with the pattern.

More for beginners

Check out our quick start guide to candlestick charting for more information if you are new to candlestick charting!