Dragonfly Doji Candlestick Pattern: The Candles Before Occidental's 2022 Run and at Goldman's 2020 Low

On December 20, 2021, as worries about the Omicron variant sank oil, Occidental Petroleum printed a dragonfly doji. Bought at that close with a stop under its low, the trade risked 3.4%. By May 27, 2022 the stock was up 162.6%.

On October 30, 2020, the Friday before the US election, Goldman Sachs printed one at a prior low. The risk was 1.9%. By March 12, 2021 the stock was up 84.5%.

Neither stock has traded below its dragonfly's low since. Here is how to read a dragonfly doji, where the stop goes, and how to find the next one.

What $10,000 became#

Prices are split-adjusted, as on the chart.

The dragonfly doji in one table#

A dragonfly doji is one daily candle that opens and closes at almost the same price, near the top of the day, with a long lower shadow beneath. Sellers pushed the stock far down during the session, and buyers took all of it back by the close.

These are the rules the VCP Scanner terminal uses to name a dragonfly doji on a daily chart.

The colour doesn't matter. Occidental's closed 8 cents above its open and Goldman's 47 cents below it.

A textbook dragonfly closes at its high. The terminal allows a short upper shadow, and both examples here have one: 21% of Occidental's range and 18% of Goldman's. At 15% or less the candle is also a hammer, and the terminal lists it as a dragonfly first.

The position rule matters most. A dragonfly comes after a decline. The same shape after a rally is a different candle.

Same shape, different place#

A dragonfly is a hammer whose body has shrunk to almost nothing. After a rally the same shape is a hanging man when its upper shadow is 15% of the range or less, and a plain doji otherwise. Turn it upside down and you have a gravestone doji.

Example 1: Occidental Petroleum (OXY) before its 2022 run, Dec 20, 2021#

Open OXY in the VCP Scanner terminal →

That Monday, oil and the stock market fell on worries about the Omicron variant. Occidental opened below the previous session's low, dropped to 26.05 and climbed back to close above its open. The dot three sessions to the left marks its first dragonfly, on Dec 15; the Dec 20 one dipped under that one's low of 27.23 and marked the bottom.

What followed:

• Next session (Dec 21): closed at 28.60, up 6.0% and already above the dragonfly's high of 27.22. Its low of 27.53 is the lowest Occidental has traded since.
• Ten sessions later (Jan 4, 2022): 33.38, +23.7%.
• Feb 16, 2022: 39.65, +47.0%, a week before Russia invaded Ukraine.
• Mar 10, 2022: 58.13, +115.5%. Oil had spiked after the invasion, and on Mar 4 Warren Buffett's Berkshire Hathaway disclosed a stake of more than $5 billion.
• May 27, 2022: 70.86, +162.6%. That is 47 times the 0.93 risked on each share.
• The low of 26.05 was never broken. On Nov 3, 2026 Occidental closed at 60.43, 124.0% above the dragonfly's close.

Occidental finished 2022 as the best-performing stock in the S&P 500. Its rise started before the war and before Buffett: it was up 47.0% by Feb 16. Its only 5% gaps came in March 2022, one down 5.1% and one up 5.5%, small next to the move.

With $500 at risk, the stop sized the trade at 537 shares, about $14,488. At the May 27, 2022 close those shares were up $23,564.

Example 2: Goldman Sachs (GS) at a prior low, Oct 30, 2020#

Open GS in the VCP Scanner terminal →

What followed:

• Next session (Nov 2): closed at 190.20, +0.6%. Its low of 188.23 is the lowest Goldman has traded since.
• Two sessions later (Nov 3, election day): 197.93, the first close above the dragonfly's high of 190.40.
• Ten sessions later (Nov 13): 219.08, +15.9%.
• Jan 14, 2021: 307.87, +62.9%.
• Mar 12, 2021: 348.81, +84.5%. That is 45 times the 3.52 risked on each share.
• The low of 185.52 was never broken. On Nov 3, 2026 Goldman closed at 896.09, 374.0% above the dragonfly's close.

On Nov 9, 2020, Pfizer's vaccine news gapped Goldman up 6.6%. That gap was about a twelfth of the run. Goldman kept climbing for years, to the record high of 1,153.99 on Jul 15, 2026, the top in the hanging man article.

With $500 at risk, the stop sized the trade at 142 shares, about $26,844. At the Mar 12, 2021 close those shares were up $22,687.

Where a dragonfly doji counts: key levels#

A dragonfly on a level is a test of that level. In the terminal, the Only at a key level switch is on by default and keeps the dragonflies that close back above one of these:

Goldman's came at a prior low, so it shows with the switch on, and the inspector reads "at a prior low". Occidental's came at a fresh three-month low, on none of these levels. To see dragonflies like it, turn Only at a key level off.

Neither stock was in Stage 2, Stan Weinstein's advancing stage. Goldman was in Stage 1, a base after its 2020 crash, and Occidental in Stage 3, a sideways stretch after its 2021 rally. Both dragonflies came just before a new advance.

How to trade a dragonfly doji#

1. Find the low. A dragonfly comes after a decline. Look for it at a prior low, a rising average or a fresh multi-month low, like Goldman's in 2020 and Occidental's in 2021.
2. Check the shape. The body is at most a tenth of the range and the lower shadow at least 70% of it. Occidental's lower shadow was 73% of its range and Goldman's 72%.
3. Choose your entry. Some traders buy the dragonfly's close. Others wait for a close above its high. Occidental gave that close the next session and Goldman two sessions later.
4. Put the stop under the low. Under the dragonfly's low, or under the lowest low of the test if price went lower earlier in it. The terminal calls this "the low, test included". The whole lower shadow sits inside the risk: 3.4% on Occidental and 1.9% on Goldman.
5. Size from the stop. Shares = money at risk ÷ (entry − stop). With $500 at risk on Goldman: 500 ÷ (189.04 − 185.52) = 142 shares.

Find dragonfly dojis on any chart in VCP Scanner#

• Open a stock in the terminal, for example OXY or GS.
• Open Candles in the chart toolbar and tick Dragonfly doji, or use the Bullish quick pick for every bullish name.
• Only at a key level is on by default. Turn it off to see every dragonfly doji on the chart.
• The chart jumps to the latest dragonfly doji. A dot marks each one under its low, and the selected one shows its stop on the price scale.
• The inspector lists the close, stop, risk to stop, level, volume and stage. Walk through the others with the ← and → keys.
• Mark the ones you care about with the drawing tools. The arrows in the charts above are the Arrow Marker (Alt+A): click where the arrow starts, then click the candle.

Candles are free, on daily, weekly and monthly charts.

Bottom line#

• A dragonfly doji is a doji with a long lower shadow after a decline: sellers pushed the price far down, and buyers took all of it back by the close.
• Occidental's came before its 2022 run and Goldman's at its 2020 low. They risked 3.4% and 1.9%, and the stocks rose 162.6% and 84.5% within 120 sessions.
• The dragonfly's low is the stop. It defines your risk before you take the trade.

Data: VCPScanner daily market data through Nov 3, 2026, split-adjusted. The examples are for education, not recommendations.