Gravestone Doji

AAA

DEFINITION of 'Gravestone Doji'

A type of candlestick pattern that is formed when the opening and closing price of the underlying asset are equal and occur at the low of the day. The long upper shadow suggests that the day's buying buying pressure was countered by the sellers and that the forces of supply and demand are nearing a balance. This pattern is commonly used to suggest that the direction of the trend maybe be nearing a major turning point.

Gravestone_doji.gif

INVESTOPEDIA EXPLAINS 'Gravestone Doji'

A gravestone doji pattern is a common reversal pattern used by traders to suggest that a bullish rally or trend is about to reverse. It can also be found at the end of a downtrend, but this version is much more rare. As you can see from the chart, on the day of the gravestone doji (shown within the black box), bearish traders realized that the price was pushed up to unjustifiably high levels so they send the price back up to where the stock opened. The close near the day's low suggests that supply is starting to outweigh demand again.

RELATED TERMS
  1. Candlestick

    A chart that displays the high, low, opening and closing prices ...
  2. Trend

    The general direction of a market or of the price of an asset. ...
  3. Reversal

    A change in the direction of a price trend. On a price chart, ...
  4. Doji

    A name for candlesticks that provide information on their own ...
  5. Evening Star

    A bearish candlestick pattern consisting of three candles that ...
  6. Morning Star

    A bullish candlestick pattern that consists of three candles ...
Related Articles
  1. The Basic Language Of Candlestick Charting
    Charts & Patterns

    The Basic Language Of Candlestick Charting

  2. Candlestick Charting: What Is It?
    Charts & Patterns

    Candlestick Charting: What Is It?

  3. Candlestick Charting: Perfecting The ...
    Forex Education

    Candlestick Charting: Perfecting The ...

  4. Candlesticks Light The Way To Logical ...
    Charts & Patterns

    Candlesticks Light The Way To Logical ...

Hot Definitions
  1. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  2. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  3. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  4. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  5. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  6. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
Trading Center