Piercing Line Bullish Pattern

🔎 Intro / Overview

The Piercing Line Pattern is a two-candle bullish reversal setup that forms after a downtrend.
- Sellers lose control → Buyers step in strongly.
- Entry and exit are rule-based using Validation and Devalidation lines to restrict false signals.
- Stop-loss is based on swing low, and Target is 1R (equal to risk distance).
This setup can be applied across any symbols and any timeframe (Just make sure it is after Downtrend or at Swing Low).
📊 Example symbols in this idea:
UPL · HAVELLS · COFORGE

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📌 How to Use

✅ Piercing Line Pattern – Confirmation Rules
1️⃣ Close Above Midpoint → The second candle must close above the midpoint of the first bearish candle.
2️⃣ Lower High Condition → The second candle’s high should be lower than the previous candle’s high, showing controlled recovery rather than immediate breakout.
3️⃣ Swing Low Context → The pattern forms after a swing low or decline, signaling potential reversal from bearish to bullish.
4️⃣ Gap/Open Condition → The second candle should open below the prior candle’s close, reflecting initial selling pressure before buyers take over.

When Pattern Confirm - Entry Rules -
📌 Validation → Close above the Pattern High.
📌 Devalidation → Close below Swing Low before validation.
When all conditions align, the Piercing Line confirms a bullish reversal opportunity.

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🎯 Trading Plan

- Entry → Candle closes above the Validation line (Pattern high).
- Failure → If candle closes below Devalidation line before validation.
- Stoploss → Swing Low.
- Target → Equal to stoploss distance (1R).

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📊 Chart Explanation

All Patterns shown in 30-min timeframe:
1️⃣ UPL (UPL Limited)
- Entry @ 694.20 → Breakout Goal confirmed only on candle close above this level.
- Devalidation Level: If price closes below 688.70, the Pattern shifts to the Failure Area.

2️⃣ HAVELLS (Havells India Limited)
- Entry @ 1598.20 → Breakout Goal confirmed only on candle close above this level.
- Devalidation Level: If price closes below 1586.50, the Pattern shifts to the Failure Area.

3️⃣ COFORGE (Coforge Limited)
- Entry @ 1800.50 → Breakout Goal confirmed only on candle close above this level.
- Devalidation Level: If price closes below 1792.10, the Pattern shifts to the Failure Area. .

📊 All three Patterns are live and active in the same timeframe.

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👀 Observation

- Piercing Line is most effective near swing lows after a clear downtrend.
- Strict validation/devalidation rules help avoid false entries.
- Works well across multiple symbols when conditions align.

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❗ Why It Matters?

- Defines entries and exits clearly with rule-based validation.
- Provides a structured framework to trade reversals confidently.

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🎯 Conclusion

The Piercing Line Pattern is a disciplined bullish reversal signal.
By combining Validation and Devalidation Rules, traders gain clarity and protection against false trades.

🔥 Patterns don’t predict. Rules protect. 🚀

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⚠️ Disclaimer

📘 For educational purposes only.
🙅 Not SEBI registered.
❌ Not a buy/sell recommendation.
🧠 Purely a learning resource.
📊 Not Financial Advice.