Marubozo

What Is a Marubozo?

A Marubozo is a type of candlestick charting formation that demonstrates a security's price didn't trade past the scope of the opening and closing price. It is a candlestick pattern that misses the mark on shadow.

Figuring out the Marubozo

The name Marubozo comes from the Japanese word for "close-edited", demonstrating a candle with no shadow. The central trait of the Marubozo on a chart is the shortfall of upper or lower shadows, meaning the chart doesn't stretch out past the opening day price range. On an up day, the opening price is equivalent to the day's low, and the closing price is equivalent to the day's high. On days that the stock has acquired, it is indicative of a bull market, and on days that it has lost, it is indicative of a bear market.

Acquiring days, or up days, strongly demonstrate that there is a greater demand for the stock than there is a supply. Or if nothing else a greater demand for the stock than there is a readiness to sell it. The inverse can be said on losing, or down days.

Candlestick charting has been well known since the times of Japanese rice shippers and rice traders. They alluded to the wide part of the candlestick as the real body, and they would utilize it to determine whether the closing price had transcended or fallen below the opening price.

At the point when a Marubozo type of candle is found in a uptrend, it is utilized to signal that the bulls are forcefully buying the asset and it proposes that the momentum may go on vertical. The bullish Marubozo candle (open equals low, high equals close) can signal a reversal when it is found toward the finish of a downtrend in light of the fact that it shows that the sentiment has changed and that the bulls are probably going to keep pushing the asset higher. Then again, a bearish Marubozo found in a downtrend (open equals high, low equals close) can signal further selling pressure, particularly whenever found at the highest point of an uptrend.

Why Use Charts to Track Stocks

Charting activity on the stock market is definitely not a groundbreaking thought. Analysts have been charting since before the New York Stock Exchange (NYSE) was made, though in a more simple form than is utilized today. Charts are utilized to make a simple to-follow visual representation of activity on the stock market. Without thinking about the explanations for declines or growth, charts track the changes and show activity over the long run.

Even a relaxed investor can peruse charts once they comprehend the essentials of what they are tracking. This will give an investor the information they possibly need to settle on choices in view of what's going on all through the market. By utilizing charts, they can see what is overall exorbitantly purchased or sold and conclude whether they might want to follow those trends or try and exploit assets that are less famous or dump assets that are in high demand.

Just know, charts can follow a wide range of highlights, so pay close consideration regarding the way things are playing out broken down. A few charts cover daily activity, while others might follow in weeks or months. For a bigger, more complete picture, an investor might need to survey various charts to see changes over both short-term and long-term periods before simply deciding.

Highlights

• A Marubozo is a long-bodied candlestick with no shadow, from the Japanese word signifying "close-trimmed".
• A candlestick without any shadows is viewed as a strong signal of conviction by either purchasers or sellers, contingent upon whether the course of the candle is up or down
• Candlestick charts take a gander at the opening and closing price on a single day and are utilized by technical traders.