Notices

Tweezers

From Traderpedia

The Tweezers candle pattern consists of two or more candles with matching highs or lows (Tweezers Top and Tweezers Bottom). The name comes from the appearance of their formation, looking similar to a pair of tweezers - and the can occur in a variety of formats - see the illustration below, however their highs or lows will always be the same.

Image:Tweezers.jpg

A tweezers pattern should preferrably have the first candle with a long real body - the colour of this will depend on if it is a rising or falling market. The second candle is where the variation can take place as this could be a Hanging Man, a Shooting star, a Harami Cross or a Dark Cloud Cover for a Tweezers top. Or a Hammer, a Harami Cross or a Piercing Pattern for Tweezers bottom. However the one thing they must have is an equal high point for Tweezers top and an equal low point for Tweezers bottom.

As well as being a reversal pattern, Tweezers top and bottom can also be continutation signal. This happens when - say, in the middle of an uptrend you find a Tweezers bottom occuring. The stock/index will 'rest' and consolidate for a while mid way up the trend and in doing this may form a Tweezers bottom. It is at this point that a signal is given to buy into that stock before it starts to resume its upward trend. In other words the Tweezers bottom has formed an intermediate line of support from which the stock/index will bounce upwards.