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The Psychology
In an uptrend or within a bounce of a downtrend, a sharp intraday sell-off is followed by a reversal which causes the stock to close near its opening price near the day's high. Although the stock recovers from its intraday sell-off, it suggests the bulls are starting to lose strength, and a reversal may occur. The pattern is a slightly more reliable if the real body is black. A weak following day on solid volume is still needed to confirm the pattern.