What is Marubozzo?
a marubozzo Candlestick is a type of charting formation that indicates that a security’s price did not trade beyond the range of opening and closing prices. This is a candlestick pattern that lacks shadow.
- a marubozzo From the Japanese word for “close-cropped” a long-drawn candlestick with no shadows.
- Candlestick charts look at opening and closing prices on the same day and are used by technical traders.
- A candlestick with no shadow is considered a strong signal of conviction by buyers or sellers, depending on whether the direction of the candle is up or down
The name maruboz comes from the Japanese word for “close-cropped”, indicating a candle with no shadow. The defining characteristic of Marubozzo on the chart is the absence of an upper or lower shadow, which means that the chart does not move beyond the price range on the opening day. On the day above, the opening price equals the day’s low, and the closing price equals the day’s high. Days that a stock has gained are a sign of a bull market, and days that it has lost are a sign of a bear market.
Rising days, or up days, strongly indicate that there is more demand for a stock than supply. Or at least there is more demand for the stock than the willingness to sell it. The opposite can be said in the days of losing, or down.
Candlestick charting has been popular since the days of Japanese rice traders and rice traders. He referred to the wide part of the candlestick as the actual body, and he would use this to determine whether the closing price has crossed above or below the price above.
When a Marubozzo type candle is found in an uptrend, it is used to signal that bulls are buying the asset aggressively and to suggest that the upward movement may continue. The Bullish Marubozzo candle (open par low, high equal close) found at the end of the downtrend could signal a reversal as it shows that sentiment has turned and the bulls may continue to push the asset higher. On the other hand, a bearish marubojo found in a downtrend (open equals high, low equals close) may indicate further selling pressure, especially if found at the top of an uptrend.
Why Use Charts to Track Stocks
Charting activity on the stock market is not a new idea. Analysts have been charting since before the creation of the New York Stock Exchange (NYSE), although used in a more primary form than today. Charts are used to create an easy-to-follow visual representation of activity on the stock market. Charts track changes and show activity over time, regardless of the reasons for the decline or increase.
Even a casual investor can read a chart once they understand the basics of what they are tracking. This will give an investor the information they need to make a decision based on what is potentially happening across the market. Using the chart, they can see what is being overbought or sold and decide whether they want to follow those trends or try to take advantage of less popular assets or higher demand ones. Want to take off the properties.
Just be aware, charts can track many different characteristics, so pay close attention to the information you are viewing. Some charts cover daily activity, while others can track over weeks or months. For a bigger, more comprehensive picture, an investor may want to review several different charts to see changes over both the short-term and long-term periods before making a decision.