Technical Analysis · Bullish Reversal
Piercing Line
A Piercing Line is a two-candle bullish reversal pattern where a bearish candle is followed by a bullish candle that opens below the prior low and closes above the midpoint of the prior candle's body.
Bullish candle
Bearish candle
Highlighted = the pattern itself
Category
Bullish Reversal
Signal
Buy
Reliability
★★★★★
Candles Involved
2
What does it signal?
A sharp intraday reversal shows buyers stepping in aggressively after an opening dip, clawing back the majority of the prior session's losses.
How to identify a Piercing Line
- Forms after a downtrend.
- First candle is a long bearish candle.
- Second candle opens with a gap down, then rallies to close more than halfway into the first candle's body — but does not fully engulf it.
How to trade a Piercing Line
- The deeper the close pierces into the first candle's body, the stronger the signal.
- Stop-loss is typically placed below the low of the second candle.
Educational only — not financial advice. Combine any candlestick pattern with broader market context, risk management, and your own trading plan.
FAQ
Common questions
Piercing Line's second candle closes above the midpoint of the first candle's body but not above its open, whereas Bullish Engulfing fully closes above the first candle's open.
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