In comparison, the reversal patterns we introduced earlier are strong reversal signals. Once they appear, it means that the bull has taken power from the bear (for example, bullish engulfing pattern, star form, or piercing pattern, etc.), or the bear has taken back the initiative from the bull (for example Said bearish engulfing pattern, evening star pattern or dark cloud cover pattern, etc.). More reversal patterns will be discussed later. Some of these patterns usually-but not always-constitute reversal signals, so they are weaker reversal signals. These patterns include pregnancy line shape, flat head top shape and flat head bottom shape, catch belt candle line, jump two crows upward, counter candle line and so on. Then this chapter will discuss some strong reversal signals, including three crows, three mountain forms, three river forms, round top, dome bottom, tower top and tower bottom.
Pregnancy line pattern: This is a two-candle pattern, one of which is an unusually large entity, the latter one is a small entity, and the small entity resides inside the large entity. Fang is currently in a truce, and the color of the small entities does not matter. The common one is the opposite of the first one, and it just fell over compared with the engulfment.
The shape of the pregnancy line is similar to the concept of contraction day in Western technical analysis theory. According to Western theory, if the highest and lowest prices of a certain day are within the price range of the previous day, this day is a contraction day. However, Western technical analysis theory believes that contraction days usually have no predictive significance. In the candlestick theory, the appearance of the pregnancy line indicates that the market will diverge from the previous trend. On the other hand, the Western concept of contraction day only requires that the highest point and the lowest point of the day are within the interval of the previous period, while the pregnancy line form requires not only that the opening and closing prices of the day are on the previous day. A wider range of opening and closing prices (that is, the previous day was a higher entity), and the distance between the opening and closing prices of the day is required to be relatively small (that is, this day is a smaller entity).
Compared with other reversal patterns, such as the hammer line, hanging line or engulfing pattern, the reversal signal formed by the pregnancy line pattern is usually not as heavy as them. When the pregnancy line pattern appears, it seems that the brake pedal of the market has been stepped on, so the current market trend is over. Then, the market often turns to a calm state. Sometimes, the pregnancy line pattern may also constitute a warning sign of major trend changes-especially if it is at the top of the market.