In case of bearish Marubozu,the open price is the highest price and close price is the lowest price of that underlying stock for that session.
This means that , there were many market participants ready to sell the underlying stock at any price during the session and due to this heavy selling ,price kept on decreasing and closed at the lowest point for that session. The expectation is that same bearish sentiment will continue for few more sessions and further selling will continue.
Decision: In case of bearish Marubozu,traders should start looking for selling opportunities, sell price should be around the closing price of bearish Marubozu.
Stop loss: What if the market reverse its direction after printing the bearish Marubozu ? The high of the candle will act as stop-loss in case that happen.
9 thoughts on “Bearish Marubozu”