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Archive for the ‘Candlestick Patterns’ Category

After an established downtrend, day one continues the trend with a black candle. Day-two is a long white day that engulfs the body of the first day, closing well above the previous days open. The third day is a white day with an even higher close than the second day. The Bullish Three Outside Up pattern is one of the more clear-cut three-day bullish reversal patterns. The formation reflects buyers overtaking selling strength, and often precedes a continued rally in price. In fact up to day-two we have a bullish Engulfing Pattern, itself a strong two-day reversal pattern.

Three Outside Up Candlestick Pattern

After an established uptrend a clear bearish Engulfing pattern occurs (one white candle and a second black candle that drives price below the prior day low and closes near the bottom of the range). The third day is a black day with an even lower close than the second day. In a market characterized by uptrend, day-twos black candle closes completely below day one, engulfing it. The first two days are a classic pattern that suggests a sell-off has taken over the market and is breaking the established trend. This bearish reversal is confirmed by a still lower day on day-three.

Three Outside Down Candlestick Pattern

Three white days occur in a row continuing an established bull trend. Each day should close higher than the previous day. Day-four is black candle that closes near the open of the first day. So long as the previous uptrend is an established one, candlestick analysts view the Three Line Strike formation as a sign that the uptrend may still continue.

Three Line Strike Bull Candlestick Pattern

After an established downtrend three long black days in a row continue this move, each closing lower than the previous day. Day-four is white candle that closes near the open of the first day. So long as the previous downtrend is an established one, candlestick analysts view this formation as a sign that the downtrend may still continue. The first three days serve as a fairly clear bearish move. Up to day-three in fact we have a Three Black Crows formation which is a strong bearish signal.

Three Line Strike Bear Candlestick Pattern

This pattern consists of three candlesticks, each gaps progressively higher. When pattern appears in an uptrend it is a sign that buying power may be diminishing.

Three Gaps Up Candlestick Pattern

This pattern consists of three candlesticks, each gaps progressively lower. When pattern appears in a downtrend it is a sign that selling power may be diminishing.

Three Gaps Down Candlestick Pattern

This pattern consists of three candlesticks. The first is a long white body, the second is a small white body and the third is a small black body. The middle small white body gaps up from the long white one. The small black body opens in the body of the small white one but then closes below the small black body. In an advancing market this is a bullish continuation pattern.

Tasuki Upside Gap Candlestick Pattern

This pattern consists of three candlesticks. The first is a long black body, the second is a small black body, and the third is a small white body. The middle small black body gaps down from the long black one. The small white body opens in the body of the small black one but then closes above the small black body. In a declining market this is a bearish continuation pattern.

Tasuki Downside Gap Candlestick Pattern

This pattern consists of two candlesticks. The first is long white candlestick and the second is a small body. The second body is near the top of the long white candlestick body or above it. When this pattern is spotted during an uptrend, it usually signals stalling out of the uptrend.

Stalled Pattern Candlestick

This pattern consists of two white candlesticks which are about the same size. The candlesticks both have the same open. If these candlesticks gap higher from a previous candlestick and the market is in an uptrend, this signals that the uptrend will continue.

Side by Side White Gapping Up Candlestick Pattern