BEARISH KICKING
Definition
This pattern starts with a white Marubozu followed by a black Marubozu. After the white Marubozu, the market opens below the previous session’s opening price, creating a gap between the two candlesticks.
Recognition Criteria
1. The market is currently defined by a dominant upward trend.
2. On the first day a white Marubozu (or a white candlestick) is observed.
3. Then we see a black Marubozu (or a black candlestick) on the second day.
4. The second day opens lower with a body gap.
Pattern Requirements and Flexibility
The Bearish Kicking pattern ideally consists of a white Marubozu followed by a black Marubozu with a gap between their bodies. However, normal or long candlesticks and the absence of a body gap are also acceptable. This allows the Bearish Separating Lines Pattern, typically a continuation pattern, to be modified and included as a reversal pattern.
Trader’s Behavior
This pattern is a strong indicator of an impending downward market trend. It appears in an uptrend, where the first day features a strong white candlestick, further confirming the bullish sentiment. On the second day, prices open below or at the previous day’s open, creating a significant gap. This gap prompts bearish traders to take action, leading the market downward, signified by a black candlestick.
Sell/Stop-Loss Levels
The confirmation level is determined by the last close. For confirmation, prices should fall below this level.
The stop-loss level is defined as the last high. If, following the bearish signal, prices rise instead of falling and either close or make two consecutive daily highs above the stop-loss level, without detecting any bullish pattern, the stop-loss is triggered.