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The Dragonfly Doji is a ____________ which is formed when the ______________ are the same or about the same price.

A) Bullish reversal pattern, open and close
B) Bearish reversal pattern, high and low
C) Neutral pattern, high and low
D) Bullish continuation pattern, open and close

1 Answer

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Final answer:

The Dragonfly Doji is a neutral candlestick pattern formed when the open and close prices are the same or nearly the same, showing market indecision. It can sometimes anticipate a reversal but mostly when confirmed by following candles.

Step-by-step explanation:

The Dragonfly Doji is a neutral pattern, which is formed when the open and close are the same or about the same price. Therefore, the correct answer to the student's question is C) Neutral pattern, high and low. This type of doji candlestick represents indecision in the market, suggesting that the buyers and sellers are in a tentative balance during the time period of the chart. However, it is important to note that while the Dragonfly Doji can be a sign of reversal in some cases, it is more often interpreted as a sign of potential reversal if confirmed by subsequent candlesticks.

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