Click to learn more. A piercing pattern is a bullish formation that forms after a decline and marks a potential change in trend. The piercing pattern on its own is not enough to signal a change in trend and a confirmation is needed for it to be considered bullish.
Bullish confirmation can come in the form of a gap up or strong close following the pattern.
The first is a relatively long black candlestick. The second is a white candlestick that opens below the previous period's close and closes above the mid-point of the black candlestick's body. Piercing patterns can work well when used in conjunction with other aspects of technical analysis. In the examples above, both patterns formed at support and were confirmed by a gap up and advance following the pattern.