That price rejection actually tells us that people were afraid and panic sold at open, driving the price down until it encountered some buying pressure and price went back up.
When gauging this pattern, it is important that :
- It is at a
- Occurs after a selling wave
- Shadow/wick goes below previous swing point low
- A increase
- An obvious wider price range
Look at the previous , it clearly tells us that there was some buying pressure but not enough momentum to carry the price up. Furthermore, it pulled back, I'd guess, halfway at previous "resistance" from the second bottom.
Thanks for reading and if you have suggestions or wanna discuss the idea, just leave a comment, I'll be happy to answer.
***Disclaimer : This is not an advice to buy the stock. Please, be aware that trading is a matter of probabilities and that it takes only ONE trader to deny your trade.***