piercing pattern

A trading indicator that signals a possible trend reversal near the bottom of a candlestick pattern. After a significant downward trend in trading over days or weeks, a long black candle is formed on the candlestick graph. The following day, the market opens lower than the close of the previous day's long black candle. Instead of continuing in a downward direction, the prices rise throughout most of the day to form a long white candle. The price closes higher than the midpoint of the previous day's black candle. The day's trading pierces through the short-term downward trend line and into the upside.