Abandoned Baby Bearish

Type: Reversal
Significance: Bearish
Description

This pattern is essentially same as the Evening Doji Star, except that the lower shadow of
the middle Doji should gap above the first and third day shadows.

Recognition
 A long white candle appearing on the first day reflecting the uptrend
 A Doji (nearly same open and close prices) appears on the second day whose lower
shadow gaps above the first and third day shadows.
 On the third day a black candle is formed that penetrates into the first day’s white
candlestick
Psyschology

A long white day during an uptrend makes it clear that the bulls are in control. Although the
trading range on the second day gaps above the first, a Doji star the very next day
introduces substantial uncertainty as bulls face resistance in driving prices higher. The third
day witnesses the seizure of control by the bears signifying a possible trend reversal.

Checkpoints
 An uptrend in prices for the last five to ten days
 Third black day penetrates more than half-way the body of the first white day
 Third day volume significantly higher than the previous two days
Confimation: Not required
 Abandoned Baby Bullish
Type: Reversal
Significance: Bullish
Description

This pattern is essentially same as the Morning Doji Star, except that the
upper shadow of the middle Doji should gap below the first and third day
shadows.

Recognition
 A long black candle appearing on the first day reflecting the downtrend
 A Doji (nearly same open and close prices) appears on the second day whose upper
hadow gaps below the first and third day shadows.
 On the third day a white candle is formed that penetrates into the first day’s black
candlestick
Psyschology

A long black day during a downtrend makes it clear that the bears are in control. Although
the trading range on the second day gaps below the first, a Doji star the very next day
introduces substantial uncertainty as bears face resistance in driving prices lower. The third
day witnesses the seizure of control by the bulls signifying a possible trend reversal.

Checkpoints
 A downtrend in prices for the last five to ten days
 Third white day penetrates more than half-way the body of the first black day
 Third day volume significantly higher than the previous two days
Confimation: Not required
Advance Block
Type: Reversal
Significance: Bearish
Description

Three white consecutive candlesticks each closing higher but with reducing body length and
relatively long upper shadows on the second and third day. Unlike the Three White Soldiers
this pattern must occur in an uptrend.

Recognition
 Three white consecutive candlesticks appearing in an uptrend.
 First day is a long day.
 Second and third day closes higher than its predecessor
  Second and third day opens within the body of its predecessor
 Progressively smaller bodies on the second and third day
 Long upper shadows on the second and third day.
Psyschology

The weakness in the uptrend is evident as profit taking on the second and third day is sure
to erode the sentiment of the bulls. This gradual erosion of sentiment might signal an
impending trend reversal.

Checkpoints
 An uptrend in prices for the last five to ten days
 Rate of body length reduction on second and third day is greater than 50%
 Second and third day have upper shadows greater than their body length
Confimation: Suggested
Belt Hold Bearish
Type: Reversal
Significance: Bearish
Description

‘Yorikiri’, the actual Japanese term used for this pattern and also a sumo wrestling
technique, means “a frontal force-out in which the attacker will be holding the mawashi (belt)
of his opponent”.

Recognition
 A long black candle with no or miniscule upper shadow, appearing in a uptrend
 Closes near the low of the day
Psyschology

The has been a steady advance in prices with bulls dominating the market. A similar day
starts with market opening significantly higher. However, the bears stage a comeback from
the very beginning of the market by pushing down the prices and holding onto the gains,
throughout the day. This might cause some nervousness among the bulls who might feel
uneasy holding onto their positions.

Checkpoints
 An uptrend in prices for the last five to ten days
 The day is an opening Marubozu, i.e. no shadows extending from the opening end of
the candle.
 A longer candle body
Confimation: Definitely required
Belt Hold Bullish
Type: Reversal
Significance: Bullish
Description

‘Yorikiri’, the actual Japanese term used for this pattern and also a sumo wrestling
technique, means “a frontal force-out in which the attacker will be holding the mawashi (belt)
of his opponent”.
Recognition
 A long white candle with no or miniscule lower shadow, appearing in a downtrend
 Closes near the high of the day
Psyschology

The has been a steady decline in prices with bears dominating the market. A similar day
starts with market opening significantly lower. However, the bulls stage a comeback from the
very beginning of the market by pushing up the prices and holding onto the gains,
throughout the day. This might cause some nervousness among the bears who might feel
uneasy holding onto their positions.

Checkpoints
 A downtrend in prices for the last five to ten days
 The day is an opening Marubozu, i.e. no shadows extending from the opening end of
the candle.
 A longer candle body
Confimation: Definitely required
Breakaway Bearish
Type: Reversal
Significance: Bearish
Description

This 5 day pattern occurring in an uptrend signifies an initial acceleration of buying pressure
that culminates into an overbought market and finally a bearish breakaway, denoting a
steady and healthy trend reversal.

Recognition
 A long, white candlestick appearing in a uptrend
 A second white day gaps open in the direction of the trend
 Third day and fourth day continues in the direction of trend with higher closes.
 Color of third day not important, but fourth day must be white
 Fifth day is a black candlestick that closes inside the gap between the first and
second day
Psyschology

Bulls are in full control and push prices significantly up. However, the market moves into the
overbought territory and any significant rise is arrested. This pushes the bulls on the
backfoot. The bears make a comeback on the fifth day and pushes the price into the gap,
showing their strength. A bearish trend reversal is underway.

Checkpoints
 An uptrend in prices for the last five to ten days
 Increasing volume on the fifth day
Confimation: Suggested
Breakaway Bullish
Type: Reversal
Significance: Bullish
Description
This 5 day pattern occurring in a downtrend signifies an initial acceleration of selling
pressure that culminates into an oversold market and finally a bullish breakaway, denoting a
steady and healthy trend reversal.

Recognition
 A long, black candlestick appearing in a downtrend
 A second black day gaps open in the direction of the trend
 Third day and fourth day continues in the direction of trend with lower closes.
 Color of third day not important, but fourth day must be black
 Fifth day is a white candlestick that closes inside the gap between the first and
second day
Psyschology

Bears are in full control and push prices significantly down. However, the market moves into
the oversold territory and any significant drop is arrested. This pushes the bears on the
backfoot. The bulls make a comeback on the fifth day and pushes the price into the gap,
showing their strength. A bullish trend reversal is underway.

Checkpoints
 A downtrend in prices for the last five to ten days
 Increasing volume on the fifth day
Confimation: Suggested
Concealing Baby Swallow
Type: Reversal
Significance: Bullish
Description

A very rare four day pattern with all black bodies denoting erosion of downward momentum
of prices and a possible bullish trend reversal. However, confirmation is necessary.

Recognition
 Two black Marubozu days occurring in a downtrend.
 The third black day opens with a downward gap, but trades into the body of the prior
day, producing a long upper shadow.
 A complete engulfing, including the shadows, of the third day by a black fourth day.
Psyschology

The bears are in complete command during a downtrend with two black falling Marubozu
days. Although the bearish momentum is initially witnessed on the third day with a gap down
opening, some concern sets in for the bears when buying pressure push up prices, although
the day ends with a new low. The fourth day starts strongly, well above the previous close,
indicating some buying interest. However, the market sells of and closes on a new low. The
erosion of selling momentum on the third and fourth day might be enough to signal a bullish
trend reversal.

Checkpoints
 A downtrend in prices for the last five to ten days
  The first two Marubozu days need to be long days
Confimation: Suggested
Dark Cloud Cover
Type: Reversal
Significance: Bearish
Description

A two day pattern occurring in a rising market, where the first day is a long white candlestick
and the second day a black candlestick that opens higher than the preceding day’s high and
makes a smart recovery and closes below the mid-point of the previous day’s body. This
might signify a potential top reversal.

Recognition
 A long white candle appearing on the first day reflecting the uptrend
 The second day is a black body that opens higher than the preceding day’s high
 The second day closes below the mid-point of the previous day’s body
Psyschology

Formation of a long white day in a market uptrend signifies that the bulls are in control. An
opening gap the very next day supports the bullishness. However, the bears make headway
and prices rebound throughout the day substantially into the previous day’s white candle
body. This is enough to cause nervousness to bulls holding positions.

Checkpoints
 An uptrend in prices for the last five to ten days
 Greater penetration of the second day black body into the first day’s white body
 Increased volume on second day
Confimation: Not required
Deliberation
Type: Reversal
Significance: Bearish
Description

Two long, white consecutive candlesticks each closing higher and opening within the body of
the previous day’s candle, is followed by small white body that gaps above the second day
body. The pattern, like the Advance Block has bearish implications and must occur in an
uptrend.

Recognition
 Two long, white consecutive candlesticks appearing in an uptrend
 Each closes higher than its predecessor
 Each opens within the body of its predecessor
 A third small white body, Spinning Top or Doji appears at the upper end of the trading
range of the second day.
Psyschology

Unlike the Advance Block where there is a gradual erosion of bullish sentiment, but the
deterioration occurs all at once on the third day. Bulls would think twice before taking new
positions.
Checkpoints
 An uptrend in prices for the last five to ten days
 The third day gaps above the second day
 Increasing volume
Confimation: Suggested
Doji Star Bearish
Type: Reversal
Significance: Bearish
Description

A two day pattern occurring in a rising market, that acts as a caution to the bulls that the
present uptrend is losing steam and a potential top reversal is underway.

Recognition
 A long white candle appearing on the first day reflecting the uptrend
 The second day is a Doji that gaps above the first day’s body
Psyschology

Formation of a long white day in a market uptrend signifies that the bulls are in control. An
opening gap the very next day supports the bullishness. However, the tug of war between
the bulls and the bears results in a Doji, reflecting the uncertainty in the market. This might
erode the confidence of bulls and a potential reversal could be underway.

Checkpoints
 An uptrend in prices for the last five to ten days
 Short shadows of the Doji Star
 The gap contains shadows of either days
Confimation: Suggested
Doji Star Bullish
Type: Reversal
Significance: Bullish
Description

A two day pattern occurring in a falling market, that acts as a caution to the bears that the
present downtrend is losing steam and a potential bottom reversal is underway.

Recognition
 A long black candle appearing on the first day reflecting the downtrend
 The second day is a Doji that gaps below the first day’s body
Psyschology

Formation of a long black day in a market decline signifies that the bears are in control. An
opening gap the very next day supports the bearishness. However, the tug of war between
the bulls and the bears results in a Doji, reflecting the uncertainty in the market. This might
erode the confidence of bears and a potential reversal could be underway.

Checkpoints
 A downtrend in prices for the last five to ten days
 Short shadows of the Doji Star
  The gap contains shadows of either days
Confimation: Suggested
Downside Gap Three Methods
Type: Continuation
Significance: Bearish
Description

This pattern occurring in a downtrend is similar to the Downside Tasuki Gap except that the
third white day closes the gap created by the first and second black days.

Recognition
 A black day occurs during an uptrend.
 A second black day gaps below the previous black day.
 A third white day appears that opens within the body of the previous black day and
closes into the body of the black day thereby closing the gap.
Psyschology

The bears are in complete command in a downtrend and push down prices considerably
lower on the second day creating a gap. The cautious bears resort to cover up their short
positions and book profits on the third day thereby pushing up prices considerably. Normally
this would be viewed as a reversal of trend, but as the gap made by the first two days have
been filled up so quickly one might think this as profit booking by the bears. This is healthy
for the downtrend which is expected to continue.

Checkpoints
 A downtrend in prices for the last five to ten days
 A long black first and second day
 Average volume of trade on the last day
Confimation: Definitely required
Downside Tasuki Gap
Type: Continuation
Significance: Bearish
Description

This is a continuation pattern that occurs in a downtrend. A Tasuki is a long narrow soft strip
of fabric used to tie the sleeves of a Kimono to enable free movements. A Tasuki line thus
holds up the current downtrend briefly after a gap in the direction of the trend and does not
completely fill the gap. This signifies a temporary correction and the current downtrend is
expected to continue.

Recognition
 A black day occurs during a downtrend.
 A second black day gaps below the previous black day.
 A third white day appears that opens within the body of the previous black day and
closes into the gap created by the first and second day.
 The third day does not completely close the gap.
Psyschology
The bears are in complete command in a downtrend and push down prices considerably
lower on the second day. The cautious bears resort to cover up their short positions and
book profits on the third day and push up prices a little. The negative sentiment is still
underway and healthy profit-taking should ensure that the downtrend would continue.

Checkpoints
 A downtrend in prices for the last five to ten days
 A long black first day
 Average volume of trade on the last day
Confimation: Suggested
Engulfing Bearish
Type: Reversal
Significance: Bearish
Description

In a rising market a long black body candlestick wraps or engulfs the previous day’s small
white body. This might signify a potential top reversal.

Recognition
 A white body is formed on the first day reflecting the uptrend
 A long black body occurs on the second day that engulfs the previous day’s black
body
Psyschology

A definite uptrend in prices have occurred when dramatically selling pressure emerges and
overwhelms the buying pressure due to a change of sentiment in the market. This would
surprise the bulls and they might not feel confident holding to their positions.

Checkpoints
 An uptrend in prices for the last five to ten days
 Small white body on the first day, tending towards a Doji
 Long black body on the second day
 Increased volume on second day
 A sharp preceding advance in prices
Confimation: Suggested
Engulfing Bullish
Type: Reversal
Significance: Bullish
Description

In a falling market a long white body candlestick wraps or engulfs the previous day’s small
black body. This might signify a potential bottom reversal.

Recognition
 A black body is formed on the first day reflecting the downtrend
 A long white body occurs on the second day that engulfs the previous day’s black
body
Psyschology
A definite downtrend in prices have occurred when dramatically buying pressure emerges
and overwhelms the selling pressure due to a change of sentiment in the market. This would
surprise the bears and they might not feel confident holding to their positions.

Checkpoints
 A downtrend in prices for the last five to ten days
 Small black body on the first day, tending towards a Doji
 Long white body on the second day
 Increased volume on second day
 A sharp preceding decline in prices
Confimation: Suggested
Evening Doji Star
Type: Reversal
Significance: Bearish
Description

Same as the Evening Star but the second day is a Doji instead of a small real body.

Recognition
 A long white candle appearing on the first day reflecting the uptrend
 A Doji (nearly same open and close prices) appears on the second day that gaps
above the first day’s body, typically called a ‘star’.
 On the third day a black candle is formed that penetrates into the first day’s white
candlestick
Psyschology

A long white day during an uptrend makes it clear that the bulls are in control. A bearish Doji
star the very next day introduces substantial uncertainty as bulls face resistance in driving
prices higher. The third day witnesses the seizure of control by the bears signifying a
possible trend reversal.

Checkpoints
 An uptrend in prices for the last five to ten days
 A body gap between the Doji and third day
 Third black day penetrates more than half-way the body of the first white day
 Third day volume significantly higher than the previous two days
Confimation: Not required
Evening Star
Type: Reversal
Significance: Bearish
Description

The nickname for the planet Venus, this three day pattern, that appears before darkness,
forecasts lower prices ahead. The small body on the second day that gaps above the first, is
the ‘star’ in question.

Recognition
 A long white candle appearing on the first day reflecting the uptrend
  A small body (white or black, color doesn’t matter) appears on the second day that
gaps above the first day’s body, typically called a ‘star’.
 On the third day a black candle is formed that penetrates into the first day’s white
candlestick
Psyschology

A long white day during an uptrend makes it clear that the bulls are in control. The small
body star the very next day introduces indecision as bulls face resistance in driving prices
higher. The third day witnesses the seizure of control by the bears signifying a possible trend
reversal.

Checkpoints
 An uptrend in prices for the last five to ten days
 A body gap between the second and third day
 Third black day penetrates more than half-way the body of the first white day
 Third day volume significantly higher than the previous two days
Confimation: Not required
Falling Three Methods
Type: Continuation
Significance: Bearish
Description

This five-day continuation pattern represents a temporary break in a downtrend as if the

market is taking a breather for the next downward move.

Recognition
 A long black day occurs during a downtrend.
 Subsequently three small bodied candlesticks occur in sequence that fall within the
trading range of the first black day and progressively advance against the downtrend.
 The second and fourth candles have white bodies and the color of the third does not
matter.
 The final fifth candlestick is a long black one that opens below the close of the
previous white day and then closes at a new low.
Psyschology

There has been a steady decline in prices with bears dominating the market. A long black
day confirms the sentiment further. Three reaction days offer resistance against the
downward movement and makes the bears doubtful and concerned. However, once the
bears understand that the bulls are unable to push prices to a new high, they come back
with renewed vigour on the fifth day and beat down prices to a new low.

Checkpoints
 A downtrend in prices for the last five to ten days
 Significantly higher volume of trade on the last day
Confimation: Not required
Hammer
Type: Reversal
Significance: Bullish
Description
The ‘Hammer’ is a single line candlestick pattern that that occurs in a market downtrend, that
might signify a potential bottom reversal. With a visual similarity with that of a hammer, it is
believed to be hammering out a bottom.

Recognition
 A small real body (white or black, color doesn’t matter) at the upper end of the trading
range.
 A long lower shadow at least twice the length of the real body.
 Non-existent or a miniscule upper shadow.
Psyschology

There has been a steady decline in prices with bears dominating the market. A similar day
starts with market selling off sharply. However, the bulls push up the prices substantially
near the day’s high and selling pressure is temporarily abated. This might cause some
nervousness among the bears who might feel uneasy holding onto their positions.

Checkpoints
 A downtrend in prices for the last five to ten days
 An extra long lower shadow
 No upper shadow
 Very small real body tending towards a Doji, preferably white in color.
 A sharp preceding decline in prices
Confimation: Definitely required
Hanging Man
Type: Reversal
Significance: Bearish
Description

The ‘Hanging Man’ is a single line candlestick pattern that that occurs in a market uptrend,
that might signify a potential top reversal. Viewed together with the preceding uptrend it
looks like a man hanging from a top.

Recognition
 A small real body (white or black, color doesn’t matter) at the upper end of the trading
range.
 A long lower shadow at least twice the length of the real body.
 Non-existent or a miniscule upper shadow.
Psyschology

There has been a steady advance in prices with bulls dominating the market. A similar day
opens higher only to sell off sharply afterwards, as bears push down the prices substantially.
Although, the bulls manage to recover some of the lost ground the buying pressure is
somewhat reduced. This might cause some nervousness among the bulls who might feel
uneasy holding onto their positions.

Checkpoints
 An uptrend in prices for the last five to ten days
 An extra long lower shadow
  No upper shadow
 Very small real body tending towards a Doji, preferably black in color.
 A sharp preceding advance in prices
Confimation: Definitely required
Harami Bearish
Type: Reversal
Significance: Bearish
Description

‘Harami’ is an old Japanese word for ‘pregnant’. In a rising market a long white body
candlestick (mother) wraps or engulfs the succeeding day’s small black body (baby). This
might signify a potential top reversal.

Recognition
 A long white candle appearing on the first day reflecting the uptrend
 A short black candle on the second day whose body is completely inside the first
day’s white body
Psyschology

During a uptrend ruled by the bulls, prices open lower surprising many bulls. This pushes
them to cover their positions, causing further price decline. Many bulls uses this opportunity
to go long hoping to catch the uptrend they missed earlier.

Checkpoints
 An uptrend in prices for the last five to ten days
 A long white body on the first day reflecting the trend
 Small black body on the second day
 Increased volume on second day
 A sharp preceding advance in prices
Confimation: Strongly suggested
Harami Bullish
Type: Reversal
Significance: Bullish
Description

‘Harami’ is an old Japanese word for ‘pregnant’. In a falling market a long black body
candlestick (mother) wraps or engulfs the succeeding day’s small white body (baby). This
might signify a potential bottom reversal.

Recognition
 A long black candle appearing on the first day reflecting the downtrend
 A short white candle on the second day whose body is completely inside the first
day’s black body
Psyschology

During a downtrend ruled by the bears, prices open higher surprising many bears. This
pushes them to cover their positions, causing further price rise. Many bears uses this
opportunity to sell short hoping to catch the downtrend they missed earlier.

Checkpoints
  A downtrend in prices for the last five to ten days
 A long black body on the first day reflecting the trend
 Small white body on the second day
 Increased volume on second day
 A sharp preceding decline in prices
Confimation: Strongly suggested
Harami Cross Bearish
Type: Reversal
Significance: Bearish
Description

‘Harami’ is an old Japanese word for ‘pregnant’. In a rising market a long white body
candlestick (mother) wraps or engulfs the succeeding Doji day (baby). This might signify a
potential top reversal. The ‘Harami Cross Bearish’ is considered more powerful than the
typical ‘Harami Bearish’ pattern.

Recognition
 A long white candle appearing on the first day reflecting the uptrend
 A Doji appearing on the second day that lies inside the first day’s white body
Psyschology

Same as the Harami Bearish pattern, but there seems to be greater indecision and
uncertainty in the market, that increases the probability of a trend reversal.

Checkpoints
 An uptrend in prices for the last five to ten days
 A long black body on the first day reflecting the trend
 Increased volume on second Doji day
 A sharp preceding advance in prices
Confimation: Not required, but recommended
Harami Cross Bullish
Type: Reversal
Significance: Bullish
Description

‘Harami’ is an old Japanese word for ‘pregnant’. In a falling market a long black body
candlestick (mother) wraps or engulfs the succeeding Doji day (baby). This might signify a
potential bottom reversal. The ‘Harami Cross Bullish’ is considered more powerful than the
typical ‘Harami Bullish’ pattern.

Recognition
 A long black candle appearing on the first day reflecting the downtrend
 A Doji appearing on the second day that lies inside the first day’s black body
Psyschology

Same as the Harami Bullish pattern, but there seems to be greater indecision and
uncertainty in the market, that increases the probability of a trend reversal.

Checkpoints
  A downtrend in prices for the last five to ten days
 A long black body on the first day reflecting the trend
 Increased volume on second Doji day
 A sharp preceding decline in prices
Confimation: Not required, but recommended
Homing Pigeon
Type: Reversal
Significance: Bullish
Description

This two-day pattern, occurring in a downtrend, is similar in appearance to the Harami

pattern, except that both the body color of the two candlesticks are black rather than
opposite in color. It signifies an erosion of the downward momentum in prices and hence a
confirmation is suggested before it could be interpreted as a bullish reversal type.

Recognition
 A long black day occuring in a downtrend.
 The second day is another black body, completely engulfed by the prior day's black
body.
Psyschology

There has been a steady decline in prices with bears dominating the market. In such a
situation prices open higher and trades in a short range, well within the prior day's black
body. The bears have found it difficult to hammer down the prices like the previous days, as
they met with some resistance from the bulls. This shows a deterioration in the downward
momentum of prices. One needs to await for the next day and see if the bulls could provide
more support and push prices in the upward direction.

Checkpoints
 A downtrend in prices for the last five to ten days
 The extent of the engulfing
Confimation: Suggested
Identical Three Crows
Type: Reversal
Significance: Bearish
Description

This pattern is similar to the Three Black Crows, but the second and third day opens at or
below the previous day’s close.

Recognition
 Three long, black consecutive candlesticks appearing in a uptrend
 Second day opens at or lower than its predecessor
 Third day opens at or lower than its predecessor
 Each close at or near their lows
 Body length is roughly maintained and does not decrease gradually.
Psyschology
The crash of the market due to panic selling after an uptrend is an indication that positive
sentiment has definitely reversed.

Checkpoints
 An uptrend in prices for the last five to ten days
 Increasing volume
Confimation: Not required
In Neck
Type: Continuation
Significance: Bearish
Description

This two day continuation pattern occurring in a downtrend could be viewed as an under-
developed version of the Piercing Line reversal pattern, except that the second day's white
body is not a long day and closes barely into the previous black day's black body. If the first
black day closes at its low, i.e. Closing Marubozu, this pattern is practically same as the On
Neck pattern.

Recognition
 A long black day occurs during a downtrend.
 A second white day opens below the first day and closes at the low of the first black
day or just inside the body by a miniscule amount.
Psyschology

Prices fall during a market decline and is confirmed by a long black day. On the second day
prices gap down in the beginning but rallies upward against the decline. However, selling
pressure stops the upward movement of prices in and around the previous day's closing
level causing considerable doubt in the mind of the bulls. The downward journey is expected
to resume shortly.

Checkpoints
 A downtrend in prices for the last five to ten days
 Significantly higher volume of trade on the second day
Confimation: Suggested
Inverted Hammer
Type: Reversal
Significance: Bullish
Description

Like its counterpart, the ‘Hammer’, the ‘Inverted Hammer’ is a single line candlestick pattern
that occurs in a market downtrend, and might signify a potential bottom reversal. However, it
is not a major reversal signal. There is practically no visual difference between an ‘Inverted
Hammer’ or a ‘Shooting Star’ as both have similar recognition criterias. It is only the
preceding trend before their occurrence that differentiates one from the other.

Recognition
 A long black candle appearing on the first day reflecting the downtrend
  A small real body (white or black, color doesn’t matter) at the lower end of the trading
range appears on the second day.
 A long upper shadow at least twice the length of the real body.
 Non-existent or a miniscule lower shadow.
Psyschology

The has been a steady decline in prices with bears dominating the market. A similar day
starts when the market opens downward. However, the bulls push up the prices substantially
throughout the day but fails to hold ground as the market closes near its low. The resistance
offered by the bulls might cause a bit of concern among the bears holding positions.

Checkpoints
 A downtrend in prices for the last five to ten days
 A gap down opening
 An extra long upper shadow
 No lower shadow
 Very small real body tending towards a Doji, preferably white in color.
Confimation: Definitely required
Kicking Bearish
Type: Reversal
Significance: Bearish
Description

A white Marubozu followed by a black Marubozu that gaps below the body of the first day.
This two day pattern signifies a potentially strong bearish reversal. Although, the market
direction according to some literature is irrelevant, yet it is better and reliable if occurring on
an uptrend.

Recognition
 A long white Marubozu day occurs typically in an uptrend.
 The second day is a long black Marubozu, but gaps below the prior day's white
Marubozu body.
Psyschology

A white Marubozu in a downtrend strengthens the bulls. However, the next day gaps open
below the previous opening and takes the bulls completely by surprise. The bears have
returned back with a vengeance and have managed to push prices down from the very
beginning. This is sure to make the bulls nervous and cover their long positions, fueling
further downward movement of price. The bears take full control by the end of the day when
prices close at the low of the trading session.

Checkpoints
 An uptrend in prices for the last five to ten days
 The extent of the gap between the two Marubozu's
Confimation: Not required
Kicking Bullish
Type: Reversal
Significance: Bullish
Description
A black Marubozu followed by a white Marubozu that gaps above the body of the first day.
This two day pattern signifies a potentially strong bullish reversal. Although, the market
direction according to some literature is irrelevant, yet it is better and reliable if occurring on
a downtrend.

Recognition
 A long black Marubozu day occurs typically in a downtrend.
 The second day is a long white Marubozu, but gaps above the prior day's black
Marubozu body.
Psyschology

A black Marubozu in a downtrend strengthens the bears. However, the next day gaps open
above the previous opening and takes the bears completely by surprise. The bulls have
returned back with a vengeance and have managed to push prices up from the very
beginning. This is sure to make the bears nervous and cover their short positions, fueling
further upward movement of price. The bulls take full control by the end of the day when
prices close at the high of the trading session.

Checkpoints
 A downtrend in prices for the last five to ten days
 The extent of the gap between the two Marubozu's
Confimation: Not required
Ladder Bottom
Type: Reversal
Significance: Bullish
Description

This five-day pattern, occurring in a downtrend, signifies a potential bullish trend reversal.
Stepwise fall in closing prices and subsequent emergence of buying interest is the pivotal
concept behind this pattern.

Recognition
 Three long black days with consecutive lower opens and closes, much like the Three
Black Crows, occurs during a downtrend.
 The fourth day is another black body, with an appreciable upper shadow, but makes
a new low.
 The last day is a long white candlestick that opens above the body of the previous
black day.
Psyschology

The steady and gradual fall of the market for the first three days signifies a predominance of
the bears and their complete control on the stock price. On the fourth day prices trade above
the open price for the first time with bulls appearing in the scene and creating some buying
pressure, not enough to push back the bears. Although, the day makes a new low but some
amount of indecision has been implanted in the minds of the bears. Many would rethink on
their short positions and would book profits the very next day. This short covering would
translate into a gap up in the opening price on the next day. With more bears booking profit
throughout the day, prices would close considerably higher.

Checkpoints
 A downtrend in prices for the last five to ten days
 Long upper shadow on the fourth day
 Significantly higher volume of trade on the last day
Confimation: Suggested
Mat Hold
Type: Continuation
Significance: Bullish
Description

This bullish continuation pattern has similarity with the Rising Three Methods except the fact
that the reaction days are higher. It is a stronger continuation signal than the Rising Three
Methods as it does not take quite the rest and maintains the upward momentum.

Recognition
 A long white day occurs during an uptrend.
 Subsequently three small bodied candlesticks occur in sequence and progressively
decline against the uptrend.
 The second and fourth candles have black bodies and the color of the third does not
matter.
 The second small black candle gaps above the first long white day.
 The final fifth candlestick is a long white one that opens above the close of the
previous black day and then closes at a new high.
Psyschology

There has been a steady advance in prices with bulls dominating the market. A long white
day confirms the sentiment further. Three reaction days offer resistance against the upward
movement with the second day gapping above the first long white day. This induces some
skepticism among the bulls. However, once they realize that the bears would be unable to
reverse the uptrend, they come back with renewed vigour on the fifth day and jack up prices
to a new high.

Checkpoints
 An uptrend in prices for the last five to ten days
 Significantly higher volume of trade on the second day
Confimation: Not required
Matching Low
Type: Reversal
Significance: Bullish
Description

This pattern, occurring in a downtrend, has similarity with the Stick Sandwich pattern in the
sense that both tries to hinge on a support level that the downward momentum of prices was
unable to penetrate. It might signal a potential bullish trend reversal if prices rebound from
the support level in an upward direction the very next day. Hence, it is advisable to wait for a
confirmation.

Recognition
 A long black day occurs during a downtrend.
 The second day is another black body, with a close at the same level as that of the
previous black day.
Psyschology

The bears have been able to push down prices during a downtrend. However, they found it
difficult to penetrate beyond a certain point as bulls provided buying support. The same
phenomenon was witnessed the very next day and the support level was once again tested
successfully. Bears would find it difficult holding onto their short positions for too long and
might decide to cover the very next day, fueling an upward movement of prices. More bulls
might enter in this scenario to make some quick profit in the short term.

Checkpoints
 A downtrend in prices for the last five to ten days
 Long upper shadow on the second day
 Significantly higher volume of trade on the last day
Confimation: Suggested
Meeting Lines Bearish
Type: Reversal
Significance: Bearish
Description

Also known as a ‘bearish counterattack line’, it is two day pattern that occurs during a market
advance. The bears make a counterattack on the bulls and push prices down, back to the
previous close . The ‘Dark Cloud Cover’ is similar but in that case the bears push back
prices further into the black real body. Hence, the ‘Dark Cloud Cover’ is a more significant
bottom reversal pattern as compared to this pattern.

Recognition
 A long white candle appearing on the first day reflecting the uptrend
 A long black candle appearing on the second day.
 The first and second day have similar or nearly similar closing prices
Psyschology

A long white candle in an uptrend confirms the bullish grip on the market. Another day opens
upward, when surprisingly, the bears appear and push down the prices, closing the day at
the same level the previous day ended. The resistance offered by the bears might cause a
bit of concern among the bulls holding positions

Checkpoints
 An uptrend in prices for the last five to ten days
 Each day is a closing Marubozu, i.e. no shadows extend from the closing end of the
candle.
Confimation: Suggested
Meeting Lines Bullish
Type: Reversal
Significance: Bullish
Description

Also known as a ‘bullish counterattack line’, it is two day pattern that occurs during a market
decline. The bulls make a counterattack on the bears and push prices up, back to the
previous close . The ‘Piercing Line’ is similar but in that case the bulls push back prices
further into the black real body. Hence, the ‘Piercing Line’ is a more significant bottom
reversal pattern as compared to this pattern.

Recognition
 A long black candle appearing on the first day reflecting the downtrend
 A long white candle appearing on the second day.
 The first and second day have similar or nearly similar closing prices.
Psyschology

A long black candle in a downtrend confirms the bearish grip on the market. Another day
opens downward, when surprisingly, the bulls appear and push up the prices, closing the
day at the same level the previous day ended. The resistance offered by the bulls might
cause a bit of concern among the bears holding positions

Checkpoints
 A downtrend in prices for the last five to ten days
 Each day is a closing Marubozu, i.e. no shadows extend from the closing end of the
candle.
Confimation: Suggested
Morning Doji Star
Type: Reversal
Significance: Bullish
Description

Same as the Morning Star but the second day is a Doji instead of a small real body.

Recognition
 A long black candle appearing on the first day reflecting the downtrend
 A Doji (nearly same open and close prices) appears on the second day that gaps
below the first day’s body, typically called a ‘star’.
 On the third day a white candle is formed that penetrates into the first day’s black
candlestick
Psyschology

A long black day during a downtrend makes it clear that the bears are in control. A bullish
Doji star the very next day introduces substantial uncertainty as bears face resistance in
driving prices lower. The third day witnesses the seizure of control by the bulls signifying a
possible trend reversal.

Checkpoints
  A downtrend in prices for the last five to ten days
 A body gap between the Doji and third day
 Third white day penetrates more than half-way the body of the first black day
 Third day volume significantly higher than the previous two days
Confimation: Not required
Morning Star
Type: Reversal
Significance: Bullish
Description

The nickname for the planet Mercury, this three day pattern, that appears before sunrise,
forecasts higher prices ahead. The small body on the second day that gaps below the first, is
the ‘star’ in question.

Recognition
 A long black candle appearing on the first day reflecting the downtrend
 A small body (white or black, color doesn’t matter) appears on the second day that
gaps below the first day’s body, typically called a ‘star’.
 On the third day a white candle is formed that penetrates into the first day’s black
candlestick
Psyschology

A long black day during a downtrend makes it clear that the bears are in control. The small
body star the very next day introduces indecision as bears face resistance in driving prices
lower. The third day witnesses the seizure of control by the bulls signifying a possible trend
reversal.

Checkpoints
 A downtrend in prices for the last five to ten days
 A body gap between the second and third day
 Third white day penetrates more than half-way the body of the first black day
 Third day volume significantly higher than the previous two days
Confimation: Not required
On Neck
Type: Continuation
Significance: Bearish
Description

This two day continuation pattern occurring in a downtrend could be viewed as an under-
developed version of the Piercing Line reversal pattern, except that the second day's white
body is not a long day and closes roughly at the same level as the low of the previous black
day.

Recognition
 A long black day occurs during a downtrend.
 A second white day opens below the first day and closes roughly at the low of the
first black day.
 The second white day is not a long day
Psyschology
Prices fall during a market decline and is confirmed by a long black day. On the second day
prices gap down in the beginning but rallies upward against the decline. However, selling
pressure stops the upward movement at the previous day's low level causing considerable
doubt in the mind of the bulls. The downward journey is expected to resume shortly.

Checkpoints
 A downtrend in prices for the last five to ten days
 Significantly higher volume of trade on the second day
Confimation: Suggested
Piercing Line
Type: Reversal
Significance: Bullish
Description

A two day pattern occurring in a falling market, where the first day is a long black candlestick
and the second day a white candlestick that opens lower than the preceding day’s low
makes and makes a smart recovery and closes above the mid-point of the previous day’s
body. This might signify a potential bottom reversal.

Recognition
 A long black candle appearing on the first day reflecting the downtrend
 The second day is a white body that opens lower than the preceding day’s low
 The second day closes above the mid-point of the previous day’s body
Psyschology

Formation of a long black day in a market decline signifies that the bears are in control. An
opening gap the very next day supports the bearishness. However, the bulls make headway
and prices rebound throughout the day substantially into the previous day’s black candle
body. This is enough to cause nervousness to bears holding positions.

Checkpoints
 A downtrend in prices for the last five to ten days
 Greater penetration into the first day’s black body
 Increased volume on second day
Confimation: Suggested, but not required
Rising Three Methods
Type: Continuation
Significance: Bullish
Description

This five-day continuation pattern represents a temporary break in an uptrend as if the

market is taking a breather for the next upward move.

Recognition
 A long white day occurs during an uptrend.
 Subsequently three small bodied candlesticks occur in sequence that fall within the
trading range of the first white day and progressively decline against the uptrend.
  The second and fourth candles have black bodies and the color of the third does not
matter.
 The final fifth candlestick is a long white one that opens above the close of the
previous black day and then closes at a new high.
Psyschology

There has been a steady advance in prices with bulls dominating the market. A long white
day confirms the sentiment further. Three reaction days offer resistance against the upward
movement and makes the bull doubtful and concerned. However, once the bulls understand
that the bears are unable to push prices to a new low, they come back with renewed vigour
on the fifth day and jack up prices to a new high.

Checkpoints
 An uptrend in prices for the last five to ten days
 Significantly higher volume of trade on the last day
Confimation: Not required
Separating Lines Bearish
Type: Continuation
Significance: Bearish
Description

This bearish continuation pattern represents a vigorous tussle between the bulls and the
bears during a market decline. A strong buying pressure in a downtrend is quickly diffused
by the bears the very next day with a bearish Belt Hold.

Recognition
 A long white day occurs during a downtrend.
 A long black day appears on the second day.
 The second day opens roughly at the same price level as that of the first day open.
Psyschology

There has been a steady decline in prices with bears dominating the market. A surprising
long white day appears causing some nervousness among the bears. However, the bearish
sentiment is so strong that the very next day prices open roughly from the previous white
day's opening and rallies throughout the day to close lower. The temporary skepticism has
evaporated and the downtrend is likely to continue.

Checkpoints
 A downtrend in prices for the last five to ten days
 Significantly higher volume of trade on the second day
Confimation: Suggested
Separating Lines Bullish
Type: Continuation
Significance: Bullish
Description
This bullish continuation pattern represents a vigorous tussle between the bulls and the
bears during a market advance. A strong selling pressure in an uptrend is quickly diffused by
the bulls the very next day with a bullish Belt Hold.

Recognition
 A long black day occurs during an uptrend.
 A long white day appears on the second day.
 The second day opens roughly at the same price level as that of the first day open.
Psyschology

There has been a steady advance in prices with bulls dominating the market. A surprising
long black day appears causing some nervousness among the bulls. However, the bullish
sentiment is so strong that the very next day prices open roughly from the previous black
day's opening and rallies throughout the day to close higher. The temporary skepticism has
evaporated and the uptrend is likely to continue.

Checkpoints
 An uptrend in prices for the last five to ten days
 Significantly higher volume of trade on the second day
Confimation: Definitely required
Shooting Star
Type: Reversal
Significance: Bearish
Description

Like its counterpart, the ‘Hanging man’, the ‘Shooting Star’ is a single line candlestick pattern
that that occurs in a market uptrend, that might signify a potential top reversal. However, it is
not a major reversal signal.

Recognition
 A long white candle appearing on the first day reflecting the uptrend
 A small real body (white or black, color doesn’t matter) at the lower end of the trading
range appears on the second day.
 A long upper shadow at least twice the length of the real body.
 Non-existent or a miniscule lower shadow.
Psyschology

The has been a steady advance in prices with bulls dominating the market. A similar day
starts when the market opens upward and rallies to a new high. However, the bears push
down the prices substantially throughout the day and the market closes near its low. The
resistance offered by the bears might cause a bit of concern among the bulls holding
positions.

Checkpoints
 An uptrend in prices for the last five to ten days
 A gap up opening
 An extra long upper shadow
  No lower shadow
 Very small real body tending towards a Doji, preferably black in color.
Confimation: Definitely required
Side By Side White Lines Bearish
Type: Continuation
Significance: Bearish
Description

This is a continuation pattern that occurs in a downtrend. Two white candlesticks of nearly
similar size occur side by side after gapping below a black candlestick on the first day. It
signifies that selling pressure has not waned away and the present downtrend should
continue.

Recognition
 A black day occurs during a downtrend.
 A second and third white day gaps below the first black day.
 Both white days are roughly the same size and opens nearly at the same price.
Psyschology

The bears are in complete command in a downtrend and a long black day confirms the
sentiment. The next day witnesses greater selling pressure and prices gaps considerably
below the previous day but trades higher throughout the session without closing the gap.
The resistance in enough to cause bears to cover their short positions on the third day and
cause a rally to close higher, but not enough to close the gap. This signifies that the short
covering and any buying interest was not convincing enough and current downtrend has a
high chance to continue.

Checkpoints
 A downtrend in prices for the last five to ten days
 A long black first day
 Significantly higher volume of trade on the last two days
Confimation: Suggested
Side By Side White Lines Bullish
Type: Continuation
Significance: Bullish
Description

This is a continuation pattern that occurs in an uptrend. Two white candlesticks of nearly
similar size occur side by side after gapping above another white candlestick on the first day.
It signifies that buying interest has not waned away and the present uptrend should continue.

Recognition
 A white day occurs during an uptrend.
 A second and third white day gaps above the first white day.
 Both white days are roughly the same size and opens nearly at the same price.
Psyschology
The bulls are in complete command in an uptrend and a long white day confirms the
sentiment. The next day witnesses greater buying interest and prices gaps above the
previous day. However, on the third day prices open much lower as many prefer to cover
their long positions, but as the day progresses sustained buying interest pushes up prices to
their previous day's level. This signifies that the current uptrend has a high chance to
continue after some healthy profit-booking.

Checkpoints
 An uptrend in prices for the last five to ten days
 A long white first day
 Significantly higher volume of trade on the last day
Confimation: Not required
Stick Sandwich
Type: Reversal
Significance: Bullish
Description

A three day pattern occurring in a downtrend that reveals a support level that bears are
unable to penetrate. The pattern does have the potential of a bullish trend reversal, but
confirmation is normally suggested.

Recognition
 A long black day occurs typically in a downtrend.
 The second day is a white candlestick, but trades above the prior day's black body.
 A black candlestick appears on the third day having a close similar to the first day.
Psyschology

Bearish momentum is maintained during a downtrend with a long black candle. However, the
next day there is some concern among the bears when prices open higher and buying
pressure push prices further up throughout the session. The bears return strongly on the
third day, pushing down prices but does not manage to go beyond the close of the first day.
The third day closes at the same level as that of the first day. The bulls have managed to
keep the bears in check at this level curbing further erosion of prices. A support has been
established and a bullish reversal might happen.

Checkpoints
 A downtrend in prices for the last five to ten days
 The first and third day needs to be closing Marubozu days
Confimation: Suggested
Three Black Crows
Type: Reversal
Significance: Bearish
Description

Three long, black consecutive candlesticks each closing lower and opening within the body
of the previous day’s candle. The candlesticks close at or near their lows and roughly
maintain their body length, without any decrease, as a sign of the bearish implications
ahead.

Recognition
 Three long, black consecutive candlesticks appearing in a uptrend
 Each closes lower than its predecessor
 Each opens within the body of its predecessor
 Each close at or near their lows
 Body length is roughly maintained and does not decrease gradually.
Psyschology

The steady and gradual fall of the market after an uptrend is an indication that positive
sentiment has reversed and a healthy trend reversal has taken place.

Checkpoints
 An uptrend in prices for the last five to ten days
 Second and third day opens at or below the mid-point of the previous day’s body
 Increasing volume
Confimation: Not required
Three Inside Down
Type: Reversal
Significance: Bearish
Description

This is a confirmation of the Harami Bearish pattern. The first two days represent a Harami
Bearish or a Harami Cross Bearish pattern, whereas the third day is black and closes below
the first white day’s opening.

Recognition
 First two days represent a Harami Bearish or a Harami Cross Bearish occurring in a
downtrend.
 The third day is black that closes below the first day’s opening.
Psyschology

The bears have been successful in resisting the uptrend through the Harami Bearish or
Harami Cross Bearish pattern. They regain control by pushing prices further down on the
third day, confirming a short term trend reversal.

Checkpoints
 An uptrend in prices for the last five to ten days
 A long third day
 Extent of engulfment by the Harami
 Increasing volume on the third day
Confimation: Not required
Three Inside Up
Type: Reversal
Significance: Bullish
Description
This is a confirmation of the Harami Bullish pattern. The first two days represent a Harami
Bullish or a Harami Cross Bullish pattern, whereas the third day is white and closes above
the first black day’s opening.

Recognition
 First two days represent a Harami Bullish or a Harami Cross Bullish occurring in a
downtrend.
 The third day is white that closes above the first day’s opening.
Psyschology

The bulls have been successful in resisting the downtrend through the Harami Bullish or
Harami Cross Bullish pattern. They regain control by pushing prices further up on the third
day, confirming a short term trend reversal.

Checkpoints
 A downtrend in prices for the last five to ten days
 A long third day
 Extent of engulfment by the Harami
 Increasing volume on the third day
Confimation: Not required
Three Line Strike Bearish
Type: Continuation
Significance: Bearish
Description

The first three days of this bearish four-line continuation pattern represent the classical
Three Black Crows pattern. On the fourth day all the losses made in the previous three days
are eroded by a single day buying spree presumably due to short covering. This profit taking
is healthy and might possibly fuel further downward movement.

Recognition
 The first three days represent Three Black Crows.
 The fourth day is a very long white candle that opens lower than the previous close
but closes above the open of the first white day.
Psyschology

There has been a steady decline in prices in a downtrend as evidenced by the Three Black
Crows pattern. On the fourth day prices open lower but rally upward from the very beginning
of the session throughout the day to close at a new high, eroding all the losses made in the
previous three days. This might be due to extensive profit booking by the bears which looks
healthy for any further decline in prices.

Checkpoints
 A downtrend in prices for the last five to ten days
 Significantly higher volume of trade on the last day
Confimation: Definitely required
Three Line Strike Bullish
Type: Continuation
Significance: Bullish
Description

The first three days of this bullish four-line continuation pattern represent the classical Three
White Soldiers pattern. On the fourth day all the gains made in the previous three days are
eroded by a single day selling spree presumably due to long covering. This profit taking is
healthy and might possibly fuel further upward movement.

Recognition
 The first three days represent Three White Soldiers.
 The fourth day is a very long black candle that opens higher than the previous close
but closes below the open of the first white day.
Psyschology

There has been a steady advance in prices in an uptrend as evidenced by the Three White
Soldiers pattern. On the fourth day prices open higher but rally downward from the very
beginning of the session throughout the day to close at a new low, eroding all the gains
made in the previous three days. This might be due to extensive profit booking by the bulls
which looks healthy for any further rise in prices.

Checkpoints
 An uptrend in prices for the last five to ten days
 Significantly higher volume of trade on the last day
Confimation: Definitely required
Three Outside Down
Type: Reversal
Significance: Bearish
Description

This is a confirmation of the Engulfing Bearish pattern. The first two days represent an
Engulfing Bearish pattern, whereas the third black day closes lower.

Recognition
 First two days represent a Engulfing Bearish occurring in an uptrend.
 A third black day closes below the second black day’s closing.
Psyschology

The bears have been successful in resisting the uptrend through the Engulfing Bearish
pattern. They regain control by pushing prices further down on the third day, confirming a
short term trend reversal.

Checkpoints
 An uptrend in prices for the last five to ten days
 A long third day
 Extent of engulfment
 Increasing volume on the third day
Confimation: Not required
Three Outside Up
 Type: Reversal
Significance: Bullish
Description

This is a confirmation of the Engulfing Bullish pattern. The first two days represent an
Engulfing Bullish pattern, whereas the third white day closes higher.

Recognition
 First two days represent a Engulfing Bullish occurring in a downtrend.
 A third white day closes above the second white day’s closing.
Psyschology

The bulls have been successful in resisting the downtrend through the Engulfing Bullish
pattern. They regain control by pushing prices further up on the third day, confirming a short
term trend reversal.

Checkpoints
 A downtrend in prices for the last five to ten days
 A long third day
 Extent of engulfment
 Increasing volume on the third day
Confimation: Not required
Three Stars In The South
Type: Reversal
Significance: Bullish
Description

This 3 day pattern signifies a slowly deteriorating downtrend of prices with reducing trading
range but greater lows each day.

Recognition
 A long black day with a long lower shadow occurring in a downtrend.
 Similar shaped black candle on the second day with its low higher than its
predecessor
 Third day is a small black Marubozu that is inside the trading range of the second
day
Psyschology

The predominance of bears has taken a dent the first day when some buying pushed prices
up from the day’s low. On the second day something similar happens, albeit in a short
trading range. Significantly, the day sets a higher low, causing increased concern to the
bears. The third day is ruled by indecision and uncertainty and is enough to cause some
nervousness among the bears who might feel uneasy holding onto their positions

Checkpoints
 A downtrend in prices for the last five to ten days
 First day lower shadow greater than body length
 Second day lower shadow greater than body length
 Third day black candle might have small shadows
Confimation: Suggested
Three White Soldiers
Type: Reversal
Significance: Bullish
Description

Three long, white consecutive candlesticks each closing higher and opening within the body
of the previous day’s candle. The candlesticks close at or near their highs and roughly
maintain their body length, without any decrease, as a sign of the strength ahead.

Recognition
 Three long, white consecutive candlesticks appearing in a downtrend
 Each closes higher than its predecessor
 Each opens within the body of its predecessor
 Each close at or near their highs
 Body length is roughly maintained and does not decrease gradually.
Psyschology

The steady and gradual rise of the market after a downtrend is an indication that poor
sentiment has reversed and a healthy trend reversal has taken place.

Checkpoints
 A downtrend in prices for the last five to ten days
 Second and third day opens at or above the mid-point of the previous day’s body
 Increasing volume
Confimation: Not required
Thrusting
Type: Continuation
Significance: Bearish
Description

This two day continuation pattern occurring in a downtrend could be viewed as an under-
developed version of the Piercing Line reversal pattern, but more potent than either the In
Neck or the On Neck continuation patterns. The difference with the Piercing Line pattern is
that the second white day opens considerably lower than the first day making it a long white
day and closes well into the body of the first black day below its midpoint.

Recognition
 A long black day occurs during a downtrend.
 A second long white day opens well below the first day's close and closes well inside
the body of the first day but below its mid-point.
Psyschology

Prices fall during a market decline and is confirmed by a long black day. On the second day
prices gap down well in the beginning but rallies considerably upward against the decline.
However, selling pressure emerges and halts the upward movement of prices below the mid-
point of the previous day's body causing considerable doubt in the mind of the bulls. The
downward journey is expected to resume shortly.
Checkpoints
 A downtrend in prices for the last five to ten days
 Significantly higher volume of trade on the second day
Confimation: Definitely required
Tri Star Bearish
Type: Reversal
Significance: Bearish
Description

Very rare pattern, with Doji days on all three days. The middle Doji gaps above the first and
third day, and its shadow might overlap.

Recognition
 All the three days are Doji (nearly same open and close prices) days.
 The middle Doji gaps above the first and third day, and its shadow might overlap with
the first and third day Doji shadows.
Psyschology

The bearish trend has started to show some weakness on the very first day with a Doji. The
second day Doji star reflects the confusion and indirection in the market. Finally, the third
Doji day would kill any positive outlook towards the prevailing trend because of excessive
uncertainty.

Checkpoints
 An uptrend in prices for the last five to ten days
Confimation: Suggested
Tri Star Bullish
Type: Reversal
Significance: Bullish
Description

Very rare pattern, with Doji days on all three days. The middle Doji gaps below the first and
third day, and its shadow might overlap.

Recognition
 All the three days are Doji (nearly same open and close prices) days.
 The middle Doji gaps below the first and third day, and its shadow might overlap with
the first and third day Doji shadows.
Psyschology

The bullish trend has started to show some weakness on the very first day with a Doji. The
second day Doji star reflects the confusion and indirection in the market. Finally, the third
Doji day would kill any positive outlook towards the prevailing trend because of excessive
uncertainty.

Checkpoints
 A downtrend in prices for the last five to ten days
Confimation: Suggested
Two Crows
 Type: Reversal
Significance: Bearish
Description

A black day that gaps above a long white day in an uptrend, followed by another black day
that opens inside the body of its predecessor but closes inside the first day’s white body. If
we combine the last two black days as one it becomes similar to the Dark Cloud Cover
pattern.

Recognition
 A long, white candlestick appearing in a uptrend
 A second black day’s body gaps above the first
 The third black day opens inside the body of the second day.
 The third black day closes inside the body of the first day
Psyschology

An extended bullish market is suddenly interrupted by some selling pressure temporarily to

some extent. On the third day the bears regain control by pushing prices further down and
closing the gap between the first and second day. This is sure to cause some nervousness
among the bulls who might feel uneasy holding onto their positions.

Checkpoints
 An uptrend in prices for the last five to ten days
 A long black third day
 Third day closes well into the first day’s body
 Increasing volume on the third day
Confimation: Suggested
Unique Three River Bottom
Type: Reversal
Significance: Bullish
Description

An extremely rare three day bottom reversal pattern, that occurs in a downtrend. A typical
‘Three River Bottom’ pattern tests a bottom price three times and rebounds after each
attempt. This pattern closely resembles such a scenario, albeit in its own unique fashion.

Recognition
 A long black candle appearing on the first day reflecting the downtrend
 A small body black candle on the second day whose body is engulfed by the first
 The second day’s lower shadow sets a new low
 The third day’s white candle body is short and below the second candle’s body
Psyschology

A long black day in a falling market signifies the predominance of bearish sentiment.
Although the next day opens higher, the bearish sentiment causes a new low to be set.
However, the bulls push up the prices causing abatement of selling pressure. Uncertainty
grips the market as the third day opens lower but recovers and ends in a positive note,
causing some nervousness among the bear community. This gradual erosion of sentiment
might signal an impending trend reversal.

Checkpoints
 A downtrend in prices for the last five to ten days
 Extra long lower shadow on the second day, resembling a Hammer
 Increased volume on the second and third day
Confimation: Not required, but recommended
Upside Gap Three Methods
Type: Continuation
Significance: Bullish
Description

This pattern occurring in a downtrend is similar to the Upside Tasuki Gap except that the
third black day closes the gap created by the first and second white days.

Recognition
 A white day occurs during an uptrend.
 A second white day gaps above the previous white day.
 A third black day appears that opens within the body of the previous white day and
closes into the body of the first white day thereby closing the gap.
Psyschology

The bulls are in complete command in an uptrend and push up prices considerably higher on
the second day creating a gap. The cautious bulls resort to cover up their long positions and
book profits on the third day thereby pushing down prices considerably. Normally this would
be viewed as a reversal of trend, but as the gap made by the first two days have been filled
up so quickly one might think this as profit booking by the bulls. This is healthy for the
uptrend which is expected to continue.

Checkpoints
 An uptrend in prices for the last five to ten days
 A long white first and second day
 Average volume of trade on the last day
Confimation: Definitely required
Upside Gap Two Crows
Type: Reversal
Significance: Bearish
Description

A rare, three day top reversal pattern that occurs during an uptrend. The two black candles
on the second and third day represent the “two crows” sitting high on a tree-top and
menacingly looking down on the ongoing uptrend.

Recognition
 A long white candle appearing on the first day reflecting the uptrend
 A black body is formed on the second day that gaps above the first
 A second black body is formed on the third day that engulfs the second day
  The close of the third day is still above the first day’s close.
Psyschology

A long white candle in an uptrend shows the predominance of bulls. The next day opens
higher with a gap, but fails to hold ground as bears push prices down at the end. This does
not deter the bulls as the second day closes above the first and they might think it to be a
temporary weakness. They start the third day on a positive note, only to be hammered down
once again, displaying the increasing dominance of the bears. This might be enough to
cause nervousness to bulls holding positions.

Checkpoints
 An uptrend in prices for the last five to ten days
 Overlap of the first day’s body or shadow with the lower shadow of the two crows.
Confimation: Not required, but recommended
Upside Tasuki Gap
Type: Continuation
Significance: Bullish
Description

This is a continuation pattern that occurs in an uptrend. A Tasuki is a long narrow soft strip of
fabric used to tie the sleeves of a Kimono to enable free movements. A Tasuki line thus
holds up the current uptrend briefly after a gap in the direction of the trend and does not
completely fill the gap. This signifies a temporary correction and the current uptrend is
expected to continue.

Recognition
 A white day occurs during an uptrend.
 A second white day gaps above the previous white day.
 A third black day appears that opens within the body of the previous white day and
closes into the gap created by the first and second day.
 The third day does not completely close the gap.
Psyschology

The bulls are in complete command in an uptrend and push up prices considerably higher on
the second day. The cautious bulls resort to cover up their long positions and book profits on
the third day and push down prices a little. The positive sentiment is still underway and
healthy profit-taking should ensure that the uptrend would continue.

Checkpoints
 An uptrend in prices for the last five to ten days
 A long white first day
 Average volume of trade on the last day
Confimation: Suggested
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