- Psychological state of uncertainty.
- Engulfing / Outside bars
- This pattern must appear after a preceding trend in the price.
- An outside bar would have taken out the stops of both the bulls and the bears, with no follow-through. Hence both sides become less confident and this leads to range-trading behavior.
- Hammer bottom
- After a downtrend, the market opens near to the previous close, drops a lot, before closing the period up towards the level at which it opened.
- Signals an end of the downtrend where the next period will be characterised by range trading.
- Shooting star
- After an uptrend, the market opens near the previous close, rallies a lot, but closes the period down towards the level at which it opened.
- Signals that that supply and demand have become more balanced, and this balance can mean range trading.
- Hanging man
- After an uptrend, market does not rise much but falls a lot, before closing back up near to the level at which it opened.
- This is bearish, and represents the last buyers getting into the uptrend.
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