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The bearish separating lines candlestick pattern is easy to distinguish once you know its characteristics. First, there should be a marked downward trend in prices. The first day of this pattern, you will see a white candlestick. The second day will open at or near the first day’s opening price, but the candlestick will have a black body with no upper shadow. Many people will recognize this as the black opening marubozu candlestick.
This candlestick pattern may appear when there is a busy trading day that drives up the price for that day, or any other factor that is significant enough to cause a one day turnaround but not a long term change. However, this factor is only enough to bring up the prices temporarily and the downward trend usually continues after just one day. The black marubozu is merely a continuation of the bearish trend.
Bearish separating lines can be a confusing pattern for people who are not familiar with it. A white bodied candlestick is not what one expects to see during a bearish trend. Many interpret this as a sign that there will be a reversal and a subsequent upturn, or at least that the downturn is bottoming out or losing momentum. However, those who have experience with the bearish separating lines candlestick pattern know that it is a very unreliable indicator. Although this is a rare candlestick pattern, it usually does not affect a downturn at all. There is a good chance that the next day will show more selling and a further drop in price.
Your Next Move
Bearish separating lines is generally considered a bearish trend continuation candlestick pattern. This means that the bearish downward trend is likely to continue despite the one bullish day. However, the mere fact that this pattern includes both bullish and bearish candlesticks implies that it will not be very reliable. In fact, the bearish separating lines pattern is quite unreliable and, although it does not usually change the direction of the price, can actually produce a variety of different outcomes. For this reason, it is imperative that you get confirmation of the trend before acting on it.
Confirmation
Because this is such an unreliable indicator, it is imperative that the third trading day be watched closely. There are a few factors that will suggest that the downtrend will continue. First, there ought to be an even lower close on the third day. Another indicator of a bearish trend is if there is a large gap down on the third trading day. Last, any kind of black candlestick indicates that the downturn will continue, especially if the candlestick has a large body. If prices seem to stagnate or even increase, you may need to adjust your plan accordingly.
Similar Patterns
There are no real variations of bearish separating lines, but there are a few patterns that can seem very similar to the untrained eye. The most obvious of these is the bearish kicking candlestick pattern, which is similar except that there is no marubozu and no gap between the two candlesticks involved.
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Source : candlestickanalysis.com
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The bearish separating lines candlestick pattern is easy to distinguish once you know its characteristics. First, there should be a marked downward trend in prices. The first day of this pattern, you will see a white candlestick. The second day will open at or near the first day’s opening price, but the candlestick will have a black body with no upper shadow. Many people will recognize this as the black opening marubozu candlestick.
This candlestick pattern may appear when there is a busy trading day that drives up the price for that day, or any other factor that is significant enough to cause a one day turnaround but not a long term change. However, this factor is only enough to bring up the prices temporarily and the downward trend usually continues after just one day. The black marubozu is merely a continuation of the bearish trend.
Bearish separating lines can be a confusing pattern for people who are not familiar with it. A white bodied candlestick is not what one expects to see during a bearish trend. Many interpret this as a sign that there will be a reversal and a subsequent upturn, or at least that the downturn is bottoming out or losing momentum. However, those who have experience with the bearish separating lines candlestick pattern know that it is a very unreliable indicator. Although this is a rare candlestick pattern, it usually does not affect a downturn at all. There is a good chance that the next day will show more selling and a further drop in price.
Your Next Move
Bearish separating lines is generally considered a bearish trend continuation candlestick pattern. This means that the bearish downward trend is likely to continue despite the one bullish day. However, the mere fact that this pattern includes both bullish and bearish candlesticks implies that it will not be very reliable. In fact, the bearish separating lines pattern is quite unreliable and, although it does not usually change the direction of the price, can actually produce a variety of different outcomes. For this reason, it is imperative that you get confirmation of the trend before acting on it.
Confirmation
Because this is such an unreliable indicator, it is imperative that the third trading day be watched closely. There are a few factors that will suggest that the downtrend will continue. First, there ought to be an even lower close on the third day. Another indicator of a bearish trend is if there is a large gap down on the third trading day. Last, any kind of black candlestick indicates that the downturn will continue, especially if the candlestick has a large body. If prices seem to stagnate or even increase, you may need to adjust your plan accordingly.
Similar Patterns
There are no real variations of bearish separating lines, but there are a few patterns that can seem very similar to the untrained eye. The most obvious of these is the bearish kicking candlestick pattern, which is similar except that there is no marubozu and no gap between the two candlesticks involved.
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Source : candlestickanalysis.com
