Marubozu
Key Takeaways
- 01.A long real body with no wicks at the open or close.
- 02.Bullish Marubozu indicates buyers bid up the price all day without any pullback.
- 03.Bearish Marubozu indicates sellers pounded the price down all day without any recovery.
- 04.It represents high-conviction momentum that usually leads to further continuation.
Why it matters
It indicates that the trend is extremely strong. When a Marubozu breaks out of a consolidation pattern, it provides high-conviction proof of the breakout's validity. The middle of the Marubozu body often becomes a support/resistance level on future pullbacks.
When it matters
It is most important when breaking out of chart patterns or when marking the beginning of a new trend.
A solid, long rectangular candle with no upper or lower wicks.
Confirm on the chart that the candle has zero upper and lower shadows.
Common Mistakes
Buying a Marubozu that is too large
If a Marubozu is excessively large (e.g. 3x normal average daily range), it may indicate a blow-off top or capitulation bottom. Buying immediately can expose you to a sharp pullback.
๐ Real-World Example: Breakout on high volume
During a trading range consolidation, a bank stock printed a Bullish Marubozu on double its average volume, breaking above a flat resistance. The stock did not pull back and rose another 15% over the next two weeks.