Piercing Pattern
It is a strong reversal pattern that forms after a price decline.
Criteria:
The first candle has a large bearish body (at least average length, and often is a long red candle).
The second candle (today) has a bullish body. Price gapped down to open below the prior session's low and closes deeply (more than half-way) into the prior candle's red body. Because of this price action, the second candle's white body will be at least average length, or longer.
The deeper the second candle's white body penetrates the prior candle's red body, the more likely the reversal will occur. It is not unusual to see heavy volume accompany this reversal pattern.
Psychology:
The trend is down and the formation of a strong bearish candle further supports the dominance of the bears. The market gaps down during the the following session and the bears are still in control. Then the price turns up, and a strong rally ensues. By the end of the session, the bulls have been successful at closing the price deeply into the prior candle's body.
One may look at this pattern and it is obvious that there was an abrupt reversal in market sentiment.
Sounds exactly like what happened today.
Courtesy of Tina Logan.
Jordan
