Bullish Kicker: Capturing Violent Momentum Shifts
Introduction
The Bullish Kicker is not a gradual reversal; it is a violent U-turn. It usually happens when unexpected good news hits the market overnight, causing sentiment to flip instantly.
It is one of the few patterns where the previous trend doesn’t matter as much because the new momentum is so strong.pattern chart" src="https://encrypted-tbn0.gstatic.com/licensed-image?q=tbn:ANd9GcSCf2YgD6QWTiKKw59fXd87YvrxfguT5qPaqiF7cd0eo_Hlnpytzhri20CF7KcO7FwJ1EcrmcT76W7fzFZDLQeXTIuTrFy7Zu_FA77Akz1Yu-nh67I">
How to Identify It
- Candle 1: A Red candle (usually large).
- Candle 2: A Green candle that opens above the previous day’s open (a gap up) and rallies higher.
- The Gap: There is a visible gap between the two bodies. The wicks typically do not overlap.
The Psychology
Imagine a company announces record profits overnight after a week of dropping stock prices. The market “kicks” the price higher. Short sellers are trapped instantly with no chance to exit at a profit.
Trading Strategy
- Speed: This is a fast-moving pattern.
- Entry: Enter as soon as the price moves above the opening of the Green candle.
- Stop Loss: Below the low of the Green candle. Do not use the Red candle for stops, as it is too far away.