Definition: Get the highest rated stock from Americanbulls for this pattern >>>
The Bullish Abandoned Baby Pattern is a very rare bottom
reversal signal. It is composed of a Doji Star, which
gaps away (including shadows) from the prior and following
days’ candlesticks.
Recognition Criteria:
1. Market is characterized by downtrend.
2. We usually see a long black candlestick in the first
day.
3. Then a Doji appears on the second day whose shadows
gap below the previous day's lower shadow and gaps in
the direction of the previous downtrend.
4. Then we see a white candlestick on the third day
with a gap in the opposite direction with no overlapping
shadows.
Explanation:
We have a similar scenario that is valid for most of
the three-day star patterns. In a falling market, the
market shows bearish strength first with a long black
candlestick and opens with a gap on the second day.
The second day trading is within a small range and second
day closes at or very near its open. This now suggests
the potential for a rally showing that positions are
changed. The signal of trend reversal is given by the
white third day and by well-defined upward gap.
Important Factors:
The Bullish Abandoned Baby Pattern is quite rare.
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.
