Open-Close Reversal

This is a potent signal when it follows after a strong trend.

After an up-trend, a new High forms:

• With the Open near the High,
• The Close near the Low, and
• The Close must be above yesterday's Close.

After a down-trend, a new Low forms:

• With the Open near the Low,
• The Close near the High, and
• The Close must be below yesterday's Close.

Remember:

The signals are most reliable if they occur after a strong trend. If the trend is weak, so is the signal.