Spinning Top and Marubozu

Spinning Top

I mentioned this type of single candlestick when talking about doji, and for the good reason that it is very similar in meaning. However, a single instance of a spinning top may mean nothing, just as with the doji; it is the context in which you find it that gives it meaning. To see if a candle really qualifies as a spinning top, with its short body, you need to compare it with the typical candle length of the security that you are watching. If most of the candles do not have long bodies, then it may be nothing special. The spinning top needs to be much shorter than the general real body length. The length of the wicks is less important, but is usually quite long, showing indecision.

If the wicks are particularly long, then the candle becomes a special form of the spinning top, called a high wave candle. This requires both lower and upper wicks, or shadows, to be long, and shows real indecision, with these extreme prices being explored in both directions while settling back to near to the start point by the end of the day.

Marubozu

If you wanted to find the “opposite” of the doji, this would probably be it. The marubozu is the candlestick that has no wicks at all, and is all real body. Just thinking about what this means gives you the usual interpretation – it is a strong indication, whether it is a bullish or a bearish candle. From the open in the morning, the price never looked back but forged ahead until the close. There is no sign of a trade-off between the bulls and the bears, it is just one or the other from start to finish.

Of course, without looking at the individual trades during the day we don’t know if that is the whole truth, as the prices might have gone to halfway and then had a little setback before continuing, and the candle would not show us that. But overall it has to be a strong sign that the bulls or the bears, one or the other, is in control.

Just as the doji is the extreme case of the spinning top, the marubozu is the extreme case of the long body. As the name implies, the long body candles have a long real body and short wicks, and the length of the body should again be gauged by looking at what is typical for the security being followed. It should be two or three times the general length. In the same way as the Marubozu is strong, so is the long body.

It is particularly significant if the long body crosses over a previous support or resistance line, or if the stock has been trading in a range that the long body bursts out of. These are clear indications that a new breakout is beginning, giving opportunities for profits.