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To evaluate the performance of the pattern in your stock exchange within the context of other global markets, please refer to the table below. Locate your stock market to see its ranking among others. This will provide insights into the pattern’s strength and reliability, aiding you in your buying and selling decisions.
BULLISH THREE OUTSIDE UP
Definition
This is a confirmed Bullish Engulfing pattern. The first two candlesticks follow the classic Bullish Engulfing pattern, and the third day provides its confirmation.
Recognition Criteria
1. The market is currently defined by a dominant downward trend.
2. We observe a Bullish Engulfing pattern over the first two days.
3. On the third day, a white candlestick forms, closing higher than the second day’s close.
Pattern Requirements and Flexibility
A Bullish Engulfing pattern should be identified with all the previously established rules. On the third day, a white candlestick closes higher than the previous day’s close.
Trader’s Behavior
The first two days of the Bullish Three Outside Up pattern form a typical Bullish Engulfing Pattern. On the third day, a white candlestick appears, closing at a new high for the past three days, confirming that the downtrend is weakening. However, additional confirmation is still needed to establish a bullish reversal.
Buy/Stop-Loss Levels
The confirmation level is set at the last closing price. For confirmation, prices need to surpass this level.
The stop-loss level is set at the last low. After a BUY signal, the stop-loss is triggered if prices decline instead of rising and either close below the stop-loss level or record two consecutive daily lows below it, without any bearish pattern being detected.