Technical Analysis using The Pivot Boss Wick Reversal Pattern

The Pivot Boss Wick Reversal Pattern

A trader is always on the lookout for patterns that can help you make informed decisions about when to buy and sell securities. One such pattern is the Wick Reversal Pattern, which appears on a price chart when a stock experiences a sudden change in momentum. In this blog, we'll take a closer look at the Pivot Boss Wick Reversal pattern, as identified in the Secrets of Pivot Boss book by Frank Ochoa, and provide examples of this pattern on NSE's Nifty50 index & other stock charts.

The Pivot Boss Wick Reversal Pattern

The Pivot Boss Wick Reversal pattern is a specific type of wick reversal pattern that can be used to make trading decisions. This pattern appears when a candle with a long lower wick and a small or non-existent upper wick appears on a price chart. The appearance of this pattern indicates that buyers have stepped in to drive the price higher after a period of selling pressure, suggesting that a bullish reversal may be imminent. Similarly this pattern also appears when a candle with a long upper wick and a small or non-existent lower wick appears on a price chart. The appearance of this pattern indicates that sellers have stepped in to drive the price lower after a period of buying pressure, suggesting that a bearish reversal may be imminent.

3 main parameters come into consideration while analysing a reversal wick candlestick pattern

1. Size of the body. small body size
2. Size of close percentage.  closer the closing price to the high or low of the day
3. Size of the wick. Wick length which is 2 or 3 times body qualifies  

Pin bar/hammer/inverted hammer, doji patterns , hanging man, shooting /evening star, no matter what are they called , are all different combination of wick reversal pattern.

Examples of Pivot Boss Wick Reversal Pattern on NSE's Nifty50 index chart & Tech Mahindra Stock chart

Let's take a look at a couple of examples of the Pivot Boss Wick Reversal pattern on NSE's Nifty50 charts:

Example 1:

In this chart, we can see that the Nifty50 index was in a downtrend until June 20th, 2022. On this day, a candle with a long lower wick and a small upper wick appeared, indicating a potential bullish reversal. This candle is the Pivot Boss Wick Reversal pattern. Following the appearance of the pattern, the price of Nifty50 index started moving upwards, and a bullish trend was established. This trend lasted for several weeks, allowing traders who identified the Pivot Boss Wick Reversal pattern to profit from the uptrend.

Example 2: 

In this chart, we can see that the Tech Mahindra : NSE  was in a uptrend until Feb 24, 2020. On this day, a candle with a long upper wick and a small lower wick appeared, indicating a potential bearish reversal. This candle is the Pivot Boss Wick Reversal pattern. Following the appearance of the pattern, the price of Tech Mahindra : NSE started moving downwards, and a bearish trend was established. This trend lasted for several weeks, allowing traders who identified the Pivot Boss Wick Reversal pattern to profit from the downtrend.

Example 3:

In this chart, we can see that the Nifty50 index was in a downtrend until July 28 th, 2020. On this day, a candle with a long lower wick and a small upper wick appeared, indicating a potential bullish reversal. This candle is the Pivot Boss Wick Reversal pattern. Following the appearance of the pattern, the price of Nifty50 index started moving upwards, and a bullish trend was established. This trend lasted for several weeks, allowing traders who identified the Pivot Boss Wick Reversal pattern to profit from the uptrend.

Conclusion

The Pivot Boss Wick Reversal pattern is a powerful tool for traders who are looking to identify potential bullish reversals in a security. By using this pattern, traders can make informed decisions about when to buy or sell a stock and take advantage of potential uptrends or downtrends. If you're interested in learning more about this pattern, we recommend checking out the Secrets of Pivot Boss book by Frank Ochoa. With a bit of practice and experience, you'll be able to identify the Pivot Boss Wick Reversal pattern and use it to your advantage in your trading.