BULLISH UNIQUE THREE RIVER BOTTOM
Definition
This pattern, resembling a Bullish Morning Star, consists of three candlesticks and typically forms during a downtrend. The first day’s long black candlestick engulfs the second day’s small black candlestick, which has a distinctively long lower shadow. The pattern concludes with a small white candlestick that closes below the second day’s close.
Recognition Criteria
1. The market is currently defined by a dominant downward trend.
2. A black candlestick is observed on the first day.
3. The second day is a black body that opens higher, trades to a new low, and then closes near the high.
4. The third day is a short white day below the second day.
Pattern Requirements and Flexibility
The Bullish Unique Three River Bottom pattern begins with a strong black candlestick, followed by a shorter black candlestick that opens higher. On the second day, the price trades to a new low, creating a long lower shadow that extends below the previous day’s low, and this candlestick’s body is engulfed by the first day’s body. The pattern concludes with a short white candlestick that forms below the second day’s body.
Trader’s Behavior
The market is testing new lows, resulting in a black candlestick. The following day opens unexpectedly higher, but the bears demonstrate their strength, leading to new intraday lows. The day closes near its opening, forming a short black candlestick. Bearish strength is questioned, and market indecision prevails. A small white candlestick appears the next day, indicating that the bears are losing strength.
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 lower of the last two lows. 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.