Dragonfly and Gravestone Doji: Bullish vs. Bearish Signals
Recognize dragonfly and gravestone doji from their wicks and closing prices, then apply their bullish and bearish readings at support and resistance.
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- Wick Reclaims: Read Bullish and Bearish Continuation5 min read
- Three-Candle Continuation: Identify the Next Push5 min read
- Three White Soldiers and Black Crows: Read the Direction5 min read
- Rising and Falling Three Methods: Spot Trend Continuation5 min read
- Breakout Candles: Identify Bullish and Bearish Breaks5 min read
A dragonfly at support favors recovery; a gravestone at resistance favors a decline
A dragonfly doji after a decline into support is a bullish reversal setup. It records a move to lower prices followed by a close back at the top of the candle. A gravestone doji after a rise into resistance is a bearish reversal setup: the market reached higher prices but surrendered that advance by the close.
Use those as the primary directions to investigate. The next step is to check the shape, mark its extremes, and look for a break in the expected direction.
How to identify the two shapes
Each pattern consists of one completed candle with little or no body and one dominant wick.
| Identification check | Dragonfly doji | Gravestone doji |
|---|---|---|
| Visual shape | A T | An upside-down T |
| Open and close | At or very near the high | At or very near the low |
| Dominant wick | Long lower wick | Long upper wick |
| Opposite wick | Absent or very short | Absent or very short |
| Main reversal location | After a decline, preferably at support | After a rise, preferably at resistance |
A strict dragonfly has open = close = high. A strict gravestone has open = close = low. Real charts often show tiny differences; label those near-dragonfly or near-gravestone candles. This collection's near-doji exercise tolerance is a body no larger than 10% of the whole range, with the opposite wick also no longer than 10% of the range for this practice checklist. The percentage is a practice convention.
Constructed examples in price points. Gray means equal open and close; green means an up candle and red a down candle.
The dragonfly opens and closes at 110, also its high. Its low is 100. The gravestone opens and closes at 100, also its low, and reaches a high of 110. Both have a 10-point dominant wick and no body.
If the body is clearly visible, compare the candle with a hammer or hanging man, or an inverted hammer or shooting star. Two long wicks make a two-sided doji, not a clean T-shaped example.
Apply the bullish dragonfly reading
Candle 4 is the signal. Candles 5 and 6 illustrate later upside confirmation.
The decline reaches a low of 99 during candle 4, then finishes at 106. That recovery is the bullish feature: the market could trade lower but could not finish there.
At candle 4's close, the working view is bullish recovery, awaiting follow-through above 106. Candle 5 closes at 109, confirming that upward break under this article's closing rule. Candle 6 adds a higher close.
On a full chart, give priority to dragonflies that test support established before the signal. The figure shows a local low; it does not establish older support by itself. Mark the next prior high as the first area the recovery must tackle.
For a practice plan, an entry condition might be a later close above 106, followed by execution under the chosen order rule. A protective reference below 99 follows the idea that the rejected low should hold. Use the actual entry price to calculate the distance to that reference.
Apply the bearish gravestone reading
The gravestone is candle 4. Its high is 121 and its open, close, and low are 114. Later candles move lower.
This is the downward counterpart. Price has been advancing, but candle 4 gives back the entire move from 114 to 121. Favor a bearish pullback, especially when the upper wick tests previously marked resistance.
The closing trigger is below 114. Candle 5 closes at 111, supplying that confirmation. The next practical references are earlier support areas below the signal and the rejected high at 121 above it.
A gravestone that appears during a rebound within a downtrend can also support bearish continuation when it rejects resistance. Describe the local rally and the broader downtrend separately so the direction is clear.
Know when to drop the setup
There is no break above 106. Candle 6 closes at 97, below the dragonfly low of 99.
For the bullish dragonfly, a break of the rejected low cancels the recovery setup. For the bearish gravestone, a recovery above the rejected high cancels the rejection setup. Use these boundaries to decide when the original reading no longer applies.
A long wick also creates a large potential stop distance. If the expected move runs straight into a nearby obstacle, keep the directional view but wait for a better-defined entry structure or leave the trade alone. The trading-plan guide shows how to calculate that space.
Recognition check
A candle opens at 100, closes at 100.2, reaches 110, and has a low of 99.9. It appears after a rally into resistance. What is it, and what is the working view?
Answer: A near-gravestone: a 0.2-point body near the low, a 9.8-point upper wick, and a 0.1-point lower wick. The location supports a bearish reading. Watch for a close below 99.9; a recovery above 110 invalidates the rejection.
Reference
StockCharts: Dragonfly and Gravestone Doji describes the shapes. The numerical plans and follow-through charts here are constructed teaching examples.
