Matching high is a bearish trend reversal candlestick pattern indicating the reversal of an existing uptrend. The pattern generally forms at the top of an existing downtrend; but is less popular than bullish matching low pattern. This is a two candlestick pattern composed of two bullish (white or colorless) candlesticks.
The requirements of bearish matching high candlestick pattern include,
- The pattern should form in an established uptrend.
- The first day is a long bullish day closing at a new high.
- The second day is also a bullish day which closes at or very close to the first day’s close.
Bearish matching high candlestick pattern forms when the price tends to reverse after touching a short-term resistance level. The fact that the second day is a bullish day, which closed at previous day’s close, indicates that the resistance is successfully tested; now the trend can reverse as traders tend to close their open positions.
Bearish matching high is a moderately reliable candlestick pattern, which requires confirmation of trend reversal before one can take any short positions.
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