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BULLISH CONCEALING BABY SWALLOW
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JOIN FBS Definition: Get the highest rated stock from Americanbulls for this pattern >>> This pattern is highlighted by two consecutive Black Marubozu. They are characterized by the fact that a gapping black candlestick trades into the body of the previous day and it is seen during a downtrend. Then there is another Black Marubozu on the third day showing sale of positions since it closes at a new low. However this may give incentive to the shorts to cover their positions implying that a bullish reversal is now possible. Recognition Criteria: 1. Market is characterized by downtrend. 2. We see two consecutive Black Marubozu in the first and second days. 3. Then we see a black candlestick on the third day opening with a downward gap but trading into the body of the second day and it is characterized by a long upper shadow. 4. Finally we see another Black Marubozu on the fourth day that completely engulfs the candlestick of the third day including the shadow. Explanation: Two black Marubozu show that downtrend is continuing to the satisfaction of the bears. On the third day, we see a downward gap further confirming the downtrend. However, prices on the third day start going above the close of the previous day causing some doubts about the bearish direction even though the day closes at or near its low. The next day shows us a significantly higher gap in the opening. After the opening, however, prices again go down closing at a new low. This last day may be interpreted as a good chance for the short-sellers to cover their short positions. Important Factors: The reliability of this pattern is very high, but still a confirmation in the form of a white candlestick with a higher close or a gap-up is suggested. | ||||||||||||||
BULLISH CONCEALING BABY SWALLOW
