Common K-line forms: spindles

Spindles are one of the most common candlestick patterns.

You can see it when the market is rising, falling or consolidating.

So, what does the emergence of the spindle-wire mean?

This article will explain for everyoneSpindle-wire.

What is a spindle-wire?

Spinning Top is a single candlestick pattern, which is characterized by a small solid and long upper and lower shadow.

It is often seen as a neutral pattern, its emergence implies that the market is hesitant, not enough power to push prices up or down, the future trend is uncertain.

Some experienced investors may use their aid to determine the possibility of trend reversal when a spindle-line appears on an upward or downtrend trend.

Depending on the position of the closing price, the spindles can be divided into bullish spindles (positive) and bearish spindles (yin lines).

How are the spindles formed?

For investors, in addition to understanding a single candlestick, it is also necessary to examine the meaning of a K line.

The spindles describe the saw between the buyer and the seller, but no one dominates.

A longer upper and lower shadow shows that the long and short sides try to push prices up or down on the day, but both fail. Ultimately, the position of the closing price is very close to the opening price, forming a very small entity.

If the spindle line appears in the consolidation shock market, this pulling saw state may indicate that the price will continue to consolidate.

In addition, the spindles may also appear after soaring and sharp falls.

When the spindles appear in a wave of soaring, short term weakness on behalf of bulls, early gains may be so paused or reversed; when the spindles appear in a wave of sharp fall, short term weakness on behalf of short short term weakness, early decline or therefore pause.

But whether the market reversal really occurs, it also needs to be observed further with other technical indicators.

How to identify a spindle-line in an uptrend?

In combat, the spindlebar is very easy to identify. When it appears on an uptrend or downtrend, traders often cooperate with other technical indicators to judge reversal signals.

In identifying the reversal signal of the spindles pattern in an upward trend, we need to focus on the following points (similar in a downtrend)

• Find the uptrend

The spindles may appear after a sharp price surge, so there should be a clear uptrend before the pattern. This means that the price continues to rise over a period of time.

• Smaller solid, between two long shadows

At the top of the uptrend, find a spindle-line with a small solid, longer upper and lower shadows. The color of the solid is not important, it can be either positive or yin.

• Basis for pattern confirmation: The next trading day is closed down

The next candlestick of the spindle-thread is the key to determining whether the trend reverses. Normally, the basis for pattern confirmation is the closing of the spindles on the next trading day. If not, the reversal is not confirmed and the trader will need to wait for another signal.

• Used in conjunction with other technical indicators such as support resistance

It is worth noting that the spindles is a very common candlestick and is not a very strong trend reversal signal and needs to be used in conjunction with other technical indicators such as support resistance.

As an example, the spindles are more effective when spindles appear at key price points such as support and resistance.

Case analysis

Below, we take the form of two spindles that appear in 2022 with Micron Technology's (MU) share price.

• Since July 2022, Micron Technology's share price action has formed a rectangular graphic pattern. Connecting the high points can draw a line of resistance, connecting the low points can draw a support line.

• The first spindle-line appeared after a wave of stock prices rose in October 2022, and the price reached a resistance level, trying to break but failed. The emergence of the spindles showed bulls rose weakness, the price fell the next day after the spindles, providing a confirmation signal for the form, after the share price entered a downtrend.

• The second spindles appeared after a wave of stock price plummeted from November to December 2022, and the price reached the support level. The emergence of the spindles at the support level indicates weakness, the next day after the spindles price closed up, providing confirmation signal for the form, after the share price entered an upward trend.

summed

The spindle-wire is aNeutral K-line pattern, indicating that the market is indecisive and there is no direction.

It usually appears in the uptrend, downtrend or shock market.

If the spindling line appears in the shock market, it usually indicates that the market has no direction, and the price may continue to consolidate.

If the spindlehammer appears after an upward or downtrend, a potential reversal signal may be released, but further confirmation is required.

Like all technical indicators, the spindles should be used with other signals and indicators before making a trading decision.