Candlesticker by Americanbulls.com - Bearish Abondoned Baby Pattern

Bearish Abondoned Baby Pattern

BEARISH ABANDONED BABY

Type:	Reversal
Relevance:	Bearish
Prior Trend:	Bullish
Reliability:	High
Confirmation:	Suggested
No. of Sticks:	3

Definition: Get the highest rated stock from Americanbulls for this pattern >>>

The Bearish Abandoned Baby Pattern is a very rare top reversal signal. It is basically composed of a Doji Star, which shows gaps (including shadows) from the prior and following sessions’ candlesticks.

Recognition Criteria:

1. Market is characterized by uptrend.
2. We see a long white candlestick in the first day.
3. Then we see a doji on the second day whose shadows characteristically gap above the previous day's upper shadow and also gaps in the direction of the previous uptrend.
4. Finally we see a black candlestick characterized with a gap in the opposite direction, with no overlapping shadows.

Explanation:

Most of the three-day star patterns have similar scenarios. In an uptrend, the market seems still strong displaying a long white candlestick and opening with a gap on the second day. The trading in second day is within a small range and its closing price is equal or very near to its opening price. Now there is a sign of sale-off potential with reversal of positions. The trend reversal is confirmed by the black candlestick on the third day. Downward gap also supports the reversal.

Important Factors:

The Bearish Abandoned Baby Pattern is quite rare.

The reliability of this pattern is very high, but still a confirmation in the form of a black candlestick with a lower close or a gap-down is suggested.

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