The Stock Stethoscope

The “Bullish Counterattack Line” is a candlestick pattern that occurs during a downtrend and signals a potential reversal in the trend.

It is formed by two candles: the first is a bearish candle, and the second is a bullish candle that opens below the previous day’s close but then closes above the previous day’s open. The second candle’s close should be above the midpoint of the first candle’s body.

The pattern shows that after a downtrend, the bears are still in control at the opening of the second day. However, the bulls then take control and push the price higher, which closes above the previous day’s open. The pattern indicates a potential shift in the market sentiment from bearish to bullish, and traders may see it as a signal to enter a long position.

Traders should be cautious when using this pattern and confirm it with other technical indicators or price action analysis. It is also important to use proper risk management strategies to avoid potential losses.