What is the piercing line pattern?
The piercing line is a bullish candlestick pattern. A red candle, then a green one opening below it and closing back above its midpoint.
How does the piercing line form?
A long red bar, then a bar that opens below its low and closes back above the midpoint of that red body.
How do you confirm a piercing line?
The midpoint is the test. Closing at 40% of the previous body is a different bar from closing at 60%, even though both look like a bounce.
When does the piercing line fail?
It fails when the open below was a gap that simply filled. The recovery had nothing to do with demand, only with the gap closing.
No chart pattern works every time. The examples on this page were chosen because they show the pattern clearly, and in real markets patterns fail often.
Practice on real charts
3 real examples of the piercing line, cut off where the pattern completed. Make your call, then see what happened.
The shaded area is a piercing line. Where did price go next?
