What do you think of when you look at the opening gap and rally in Apple Inc (AAPL)? My first thought was Meeting Lines. If you said something different, you of course would be wrong. 

All kidding aside, the pattern was really interesting and instructive as a bullish reversal pattern. Let’s take the deeper dive into the psychology of the move by learning more about the Meeting Lines candle pattern.

Meeting Lines (Bullish) Basics

The idea of the Meeting Lines pattern is that the bulls were able to take advantage of a bearish opening gap to rally the price to the high of the session and in line with the previous day’s close. This is a rather significant indication of exhaustion on the part of sellers.

The opening gap was representative of overnight selling interest that cleared the supply of willing sellers. The ability of the bulls to quickly take charge and to lead the charge into the close makes this a bullish reversal pattern.

• Overall Rating: 4 Star.
• Directional Bias: Bullish Reversal.
• Number of Candles: 2.
• Frequency Rating: 2 Star.

Pattern Description

The Meeting Lines pattern forms at the end of a downtrend. The first candle of the formation is a tall closed candle followed by an opening gap lower with a close near the previous day’s close.

Volume Description

Falling volume during the formation of a Meeting Lines candle pattern with higher volume on the breakout increases performance.

Statistical Notes

Taller Meeting Lines patterns with long bodies or shadows that occur in a neutral or bullish primary trend often increase performance.

Measuring Technique

Add the trading range of the pattern to the close of second candle.

Conclusion

Meeting Lines candle patterns aren’t the most common candle pattern, but they are productive at identifying a support level. Now, I realize that AAPL doesn’t exactly meet all the requirements of the pattern, but it certainly fits the spirit of the pattern. One of the great things about this pattern is that the indication is significant, and the confirmation comes early in the move.