Just like with Western analysis, candlesticks can forecast changes in market direction. Some have only one candle, usually with a specific shape. Others have two or more candles combining simple candles with more exotic shapes. The simplest reversal pattern is the Umbrella candlestick. The color of the real body is not important.
Umbrellas can be either bullish or bearish depending on where they appear in a trend.
If an umbrella appears in an uptrend it is bearish, and is referred to as a hanging man . The latter's ominous name is derived from its look of a hanging man with dangling legs. The engulfing pattern is a strong reversal signal, especially after a prolonged trend. It is similar to the Western reversal pattern. The bearish engulfing pattern has a black real body that engulfs the prior day's white real body.