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The formation of the Doji candlestick indicates what?

A) A strong trend
B) A potential reversal or indecision
C) Continuation of the current trend
D) A market consolidation

1 Answer

3 votes

Final answer:

A Doji candlestick indicates potential reversal or indecision in the market, suggesting equilibrium between bulls and bears.

Step-by-step explanation:

The formation of the Doji candlestick is a signal that may indicate a potential reversal or indecision in the market. A Doji is characterized by its small body, showing that the opening and closing prices are close to each other. While it may not signify a definitive change in the market trend, it suggests that neither bulls nor bears could gain control, and therefore, investors and traders should watch subsequent price action closely for confirmation of a directional move.

User Mark Borgerding
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