Recently I saw a comment on one stock, It was as :

At 11:57 hrs some stock has formed a bearish bar reversal chart pattern today. A Bearish Bar Reversal occurs when today's high is higher than its previous day high and the current price / today's close is lower than its previous day close.

Can anyone tell me what's this bearish bar reversal? and how does it affect to the stock?

  • 5
    Isn't the definition given quite clearly in what you quote? Apr 6 '15 at 12:13
  • @ChrisInEdmonton Yes it does, but I want to know more, how does it affect to the stock?
    – Mox Shah
    Apr 6 '15 at 12:14
  • 7
    It doesn't affect the stock; it's a description of what the stock just did.
    – keshlam
    Apr 6 '15 at 18:44

What it is trying to describe is the psychology around the current price of the stock.

In candlestick charts for example, if you get what is called a Bearish Engulfing Candle (where the open is higher than the previous day's close and the close is lower than the previous day's open) at the top of an uptrend, this could mean that the top may have been reached and the bears are taking over the bulls.

A Bearish Engulfing candle is seen as a bearish reversal pattern, as the bulls start the day by opening the stock at a higher price than yesterday's close, but by the end of the day the bears have taken over as the price drops below yesterday's open. This reversal pattern can be even more pronounced and effective if it coincides with other chart indicators, such as an overbought momentum indicator.

If you want to learn more look up about the Psychology of the market and Candlestick Charting.

  • 3
    I may be cynical, but I suspect more people make money explaining how candlesticking et al "would have told you what the price was going to do" after the event than who make money using such techniques to predict what the price is going to do.
    – TripeHound
    May 18 '18 at 7:22
  • @TripeHound - most of the information I have learnt about candlestick charting from have been freely available, however, this information has helped me make some good money in the stock market. Also technical analysis is not about predicting anything, however it is a lot about psychology and probabilities, and even more about risk management.
    – Victor
    May 19 '18 at 1:38
  • I should have been clearer: I wasn't referring to you, but more to people who sell ideas like this as "How to make money on the stockmarket" books/courses, where one's first thought is "if it's that easy, why are they selling books about it instead of doing it"? And I'll accept it can help with probability/risk management... the (a) problem comes when some people take techniques like this too far and assume they're "absolute predictors".
    – TripeHound
    May 19 '18 at 5:48
  • @TripeHound - when I learn something new I like to talk about it with others, when that thing helps me make money, I like to show others how I did it. I have attended some seminars, all for free (some for free for me due to my broker sponsoring the presenter), I have met the presenter and found the same thing about them, they like to teach others what they have learnt. The problem with a lot that are attending is that they don't really want to learn, they just want instructions on how to get rich quick, they don't want to put the hard yards in, and get the wrong message from the presentation.
    – Victor
    May 19 '18 at 22:23

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