The pattern gives a weaker signal than the Bullish Engulfing pattern.
- Bullish bottom reversal pattern
- Follows a downtrend
- 1st candle is a long red body
- 2nd candle is a long green body
- 2nd candle opens below the previous day's low
- 2nd candle closes above midpoint of the previous candle
- The deeper the 2nd candle closes into the 1st one, the stronger the signal
- The lowest low of the 2 sessions is considered support
- Confirmation is suggested in the form of a higher close or a gap up on the next candle
Below is a chart example of the Piercing Line pattern on a 5 min Gold /USD chart.