From Doji to Engulfing patterns — master these 10 candlestick formations with real NSE stock examples, and learn to predict price reversals and continuations. Candlestick patterns originated in Japan and are now the foundation of technical analysis used by traders across NSE and BSE.
1. Doji — The Indecision Candle
A Doji forms when open and close prices are nearly equal, creating a cross or plus shape. It signals market indecision. When a Doji appears after a strong uptrend or downtrend, it often signals a potential reversal. Watch for Doji patterns on NIFTY 50 stocks at key support/resistance levels.
2. Hammer — Bullish Reversal
A Hammer has a small body at the top with a long lower shadow (at least 2x the body). It appears at the bottom of a downtrend and signals that buyers stepped in to push prices back up. Confirm with the next candle closing higher.
3. Bullish/Bearish Engulfing
A Bullish Engulfing pattern occurs when a large green candle completely engulfs the previous red candle — a strong buy signal at support. A Bearish Engulfing is the opposite, signaling a potential top. These are among the most reliable reversal signals on NSE daily charts.
4. Morning Star — 3-Candle Reversal
The Morning Star is a 3-candle bullish reversal pattern: a large red candle, followed by a small candle (gap down), followed by a large green candle that closes above the midpoint of the first candle. It signals the end of a downtrend.
5. Shooting Star — Bearish Reversal
A Shooting Star has a small body at the bottom with a long upper shadow. It appears at the top of an uptrend and signals selling pressure. Equally powerful as a reversal signal when combined with overbought RSI.
6. Harami — Inside Bar Reversal
A Harami forms when a small candle is contained within the previous large candle's body. A Bullish Harami after a downtrend suggests the selling momentum is weakening.
7. Marubozu — Pure Momentum
A Marubozu has no shadows — just a pure body. A green Marubozu means buyers controlled the entire session. It signals strong momentum and often leads to continuation. Common in breakout stocks on NSE.
8. Tweezer Tops/Bottoms
Tweezer Tops form when two candles have equal highs at resistance — bearish reversal. Tweezer Bottoms have equal lows at support — bullish reversal. Best used on daily charts at significant price levels.
9. Three White Soldiers
Three consecutive green candles, each opening within the previous body and closing higher. A very bullish signal, especially after a period of consolidation or downtrend on NSE large-cap stocks.
10. Dark Cloud Cover
A Dark Cloud Cover forms when a red candle opens above the previous green candle's close and closes below its midpoint. It signals strong selling pressure — a warning to exit long positions or tighten stop-losses.
Never trade candlestick patterns in isolation. Always confirm with volume and at least one indicator (RSI or MACD). The strongest signals occur at key support/resistance levels on daily or weekly charts.