Final answer:
The upper and lower shadows on a candlestick chart indicate market sentiment by showing the volatility within the trading session; long shadows suggest high volatility and potential sentiment reversal, while short shadows point to consolidation.
Step-by-step explanation:
The upper and lower shadows in candlestick charting, often referred to as wicks or tails, provide visual representation of the price fluctuations within a given time period. These shadows can tell us a lot about market sentiment during that period. When a shadow is long, it signifies that there was a significant difference between the high or low and the opening or closing price, indicating volatility. For instance, a long upper shadow suggests that the buyers pushed the price up, but couldn't sustain it, hinting at a potential reversal from bullish to bearish sentiment. Conversely, a long lower shadow indicates that sellers drove prices down, but the buyers came in and pushed the price back up, suggesting a potential bullish reversal. Short shadows imply less volatility and more consolidation in prices. That said, the correct answer to the question is C) Market sentiment.