Southern Doji Candlestick Patterns
Southern Doji candlestick patterns are very strong bullish reversal candlestick patterns. Let me repeat it one more time for emphasis – Southern Doji candlestick patterns are very strong bullish reversal candlestick patterns.
A Southern Doji candlestick pattern is the general terminology used for any type of Doji candlestick pattern that develops at the bottom of a downtrend (hence the “Southern” reference).
Types of Doji candlestick patterns that are classified as Southern Doji candlestick patterns are:
- Abandoned Baby Bottoms
- Hammers
- Inverted Hammers
- Long-Legged Doji
- Morning Doji Stars
While Southern Doji candlestick patterns can take many shapes and forms, all Southern Doji candlestick patterns do have at least 2 things in common – all Southern Doji candlesticks develop at the bottom of established downtrends (hence the “Southern” reference) and all are considered bullish reversal candlestick patterns.
Requirements
Each of the above illustrated Southern Doji candlestick patterns have their own very specific requirements.
Therefore refer to each Southern Doji candlestick’s webpage for its detailed, individual requirements.
Characteristics & Observations
Listed below are some of the other characteristics for Southern Doji candlestick patterns, as well as some of my personal observations.[s2If !current_user_can(access_s2member_level1)]…..
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- While there are times when Southern Doji candlestick patterns act like continuation candlestick patterns, statistically most Southern Doji candlestick patterns act like bullish reversal candlestick patterns
- When Southern Doji candlestick patterns are accompanied by heavier than normal trading volume, the chances that the Doji are signaling a major trend change from its current downtrend to a new uptrend are increased significantly
- While a bounce is anticipated when a Southern Doji candlestick pattern develops, the chances for the bounce increase significantly if the Southern Doji candlestick pattern developed on heavier than normal trading volume
- Expect extremely stiff support on any subsequent re-tests of the support area from a Southern Doji candlestick pattern; multiple attempts are typically needed to break through & close below its support area
- When a Southern Doji candlestick pattern develops, it is extremely important to analyze the stock’s chart to determine where the stock’s share price may be in the trend of one larger degree.
Support Areas
The very bottom of Southern Doji candlestick patterns are the support areas for the candlesticks.
- If a Southern Doji candlestick pattern has a lower shadow, the very bottom of the lower shadow is the support area
- When a Southern Doji candlestick pattern does not have a lower shadow, the very bottom of the real body is the support area
In order to negate the support area from a Southern Doji candlestick pattern, a subsequent candlestick must close below the support area.
Typically the share price will need to see a trading period that includes extremely heavy selling volume to not only break through a Southern Doji candlestick pattern’s support area, but to also close below it and negate its effects.
In order to negate the support area from a Southern Doji candlestick pattern, a subsequent candlestick must close below the very bottom of the Southern Doji candlestick’s lower shadow or real body, whichever is lower.
To accomplish this, typically the candlestick will need to see a trading period that includes extremely heavy selling volume to not only break through a Southern Doji candlestick pattern’s support area, but to also close below it and negate its effects.
Bearish Counter-Part
The bearish counterpart to the Southern Doji candlestick pattern is the Northern Doji candlestick pattern.
Southern Doji candlestick patterns develop at the bottom of established downtrends while Northern Doji candlestick patterns develop at the top of established uptrends.
Since several Southern Doji candlestick patterns look extremely similar to Northern Doji candlestick patterns, be certain to know where you are at in the stock or index’s trend. If you don’t, you could end up interpreting the Doji candlestick patter incorrectly.
Trading Strategies
Since Southern Doji candlestick patterns are bullish reversal candlestick patterns, once a Southern Doji candlestick is identified it becomes extremely important to start scaling-into a position, especially when the Southern Doji candlestick pattern is accompanied by heavier than normal trading volume.
Southern Doji candlestick patterns that develop on heavier than normal trading volume are not only major buy signals, but they will also provide very stiff support during any subsequent re-tests of the support area.
Real Chart Examples
Refer to the specific type of Southern Doji candlestick pattern for examples of that specific Doji candlestick.
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