Japanese candlesticks - Mat hold
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Mat hold
Definition: A mat hold structure is comprised of five Japanese candlesticks.This is a variation of the three methods structure.The first is a large bullish candlestick (green) followed by three small bearish candlesticks (red).Each small candlestick must close lower than the previous one.The opening of the second candlestick must occur on a bullish gap.Finally, the last candlestick must also open on a bullish gap and close above the second candlestick’s high point.The pattern is also called a rising three methods pattern.
Illustration:
Characteristic: A mat hold structure often forms after a significant rise characterized by several large green Japanese candlesticks.
Significance: A mat hold is a continuation pattern, it indicates continuation of the bullish movement.This is a sign that buyers are maintaining the upper hand.
Note: The three small candlesticks can be of different colours.The important thing is that these three candlesticks should be aligned downwards and ideally do not exceed the first candlestick’s mid-point.
Invalidation: If the last candlestick does not close above the top of the second candlestick, then the mat hold pattern is invalidated.
Inverted mat hold
Definition: An inverted mat hold structure is comprised of five Japanese candlesticks.This is a variation of the three methods structure.The first is a large bearish candlestick (red) followed by three small bullish candlesticks (green).Each small candlestick must close higher than the previous one.The opening of the second candlestick must occur on a bearish gap.Finally, the last candlestick must also open on a bearish gap and close below the second candlestick’s lowest point. The pattern is also called an inverted saucer pattern.
Illustration:
Characteristic: An inverted mat hold structure often forms after a significant drop characterized by several large red Japanese candlesticks.
Significance: An inverted mat hold is a continuation pattern, it indicates continuation of the bearish movement.This is a sign that sellers are maintaining the upper hand.
Note: The three small candlesticks can be of different colours.The important thing is that these three candlesticks are aligned upwards and ideally do not exceed the first candlestick’s mid-point.
Invalidation :If the last candlestick does not close below the lowest point of the second candlestick, then the inverted mat hold pattern is invalidated.
