Marubozu Candle

The term “marubozu” is a Japanese word, where “maru” means “bald,” and “bozu” means “priest.” It is a strong single candle stick pattern if confirmed by the volume and it does not depend on prior trends. Whatever the previous trend of the price, it will change if this pattern appears.

This is a single candle stick pattern formed by the formation of only one candle stick. If the right candle is identified, the trade can be very profitable.

Types

There are two candle stick patterns: bullish marubozu and bearish marubozu.

Bullish Marubozu: - This candle stick forms when all the market participants are willing to pay whatever price is hovering in the market, resulting in the formation of a long green candle with no wick on either side. In technical terms, the open price will be equal to / very close to the low of the candlestick and the closing price will be equal / very close to the high of the candlestick.

This candlestick indicates that the bulls have control over the market and there is no selling pressure. Hence, the prices will go up till it faces any resistance.

Let’s take an example, we have taken the Polycab India chart in 15 mins time frame, “Bullish Marubozu 1” marked by an arrow is a perfect example of a bullish marubozu candle, which was formed on 23rd FEB 2023. And you can see that the price went up till 3100. “Bullish Marubozu 2” is also considered the same but it has a very minute wick formed at its top noticeable if you zoom in to the chart of 24th FEB 2023.

Note: If you are wondering why after the bullish marubozu 2 the prices went down? This is because as the prices were increasing the volume was decreasing.

Bearish Marubozu: - This candle stick forms when all the market participants are willing to sell at whatever price is available in the market, resulting in the formation of a long red candle with no wick on either side. In technical terms, the open price will be equal to / very close to the high of the candlestick and the closing price will be equal / very close to the low of the candlestick.

This candlestick indicates that the bears have control over the market and there is no active buying made by the bulls. Hence, the prices will go down till it finds any support.

Let’s take an example, we have taken the Polycab India chart in 15 mins time frame, “Bearish Marubozu” marked by an arrow is a perfect example of a bearish marubozu candle, which was formed on 7th FEB 2023.

Note: The candle was not supported by volume. Hence, it will be considered as a ‘false signal.’

Tip:

Notably, the absence of shadows or wicks on the candlestick chart indicates strong market sentiment, but it doesn't guarantee that the trend will continue. It's always essential to consider other technical indicators like volumes and chart patterns to confirm the trend.