Non- Breakout Candles
What are Non-Breakout Candles?
Non-Breakout Candles have a small Body Height in comparison to Candle Height as shown below (Fig.1)
Fig.1 Non-Breakout Candle
They are called weak because by itself they cannot be leading to any trend direction and have to wait for the ensuing Strength candle to follow for the direction.
If seen on a Breakout Crossing Line, it cannot give due confirmation of Breakout and have to wait for the ensuing Strength Candle, which if does not appear the Breakout is termed ‘Failed’ as shown below (Fig.2).
Fig.2 Failed Breakout
These candles are generally seen at the Top or Bottom or even half way in a wave and mark a state of indecision or pause in the trend momentum till the ensuing Strength Candles occurs.
Examples when such Weak, Non-Breakout Indecision Candles act as Baton for further momentum has been lately seen in Nifty as shown below (Fig.3).
Fig.3 Analogy of Baton in Nifty Chart
Every time they appear, one needs to wait for the direction of Strength Candle i.e. BH>50%CH Candle to ascertain whether it is a Top depending upon the ensuing candle. This Monument with Spire well summarizes the scenario of such Small Body Candles (as shown below Fig.4)
Fig. 4 Spires representing body candles
There are innumerable Spires in the structure of a church or any monumental building which turn out to be a “Baton” for a higher Spire. This structure represents a tallest Candle Height with the tiniest body.
Here is a summarized presentation of how the Weak and Strength Candles appear for you to train your eyes to spot and detect them as shown below (Fig.5)
Fig.5 Train your eyes to spot Non – Breakout/ Breakout Candles
Also refer to post on strength or breakout candles for better understanding of the subject.