Bearish Upside Gap Two Black Crows Candlestick Pattern
Description
The Bearish Upside Gap Two Black Crows patterns, also known as the Upside-Gap Two Crows pattern is a very rare yet reliable trend reversal pattern. Comprised of three candlesticks, this pattern consists of two successive upside gap. The first occurs after a long white candlestick on day one, and a small black candlestick on day two..
An ideal bearish upside gap two black crows has the second black real body gapping above the first black real body’s open. The close is also lower than the second days close, engulfing that candlestick.. The close of the third day should NOT fill the gap between days one and two.
Easilly identified by the two black candles, the two crows in this pattern are analagous to two black crows peering down ominously from a tree. Based on this foreboding description, it is clear that this is a bearish reversal pattern.
Trading Psychology
With the market in a clear uptrend, price gaps higher on the open of the second day. Profit taking causes the new highs to fail, causing a lower close and hence a black candle. Bullish sentiment remains as the close still sets a new high. However, the third session quickly erases bullish sentiment, as profit taking turns into real selling. Although a new high has been set, price levels fail to hold onto these new highs into the close. As selling begins to gain momentum, the stock closes below the close of the previous day, a bearish signal.
Confirmation
There are several ways the two black crows candlestick pattern can be confirmed or validated. If prices fail to reach new highs on the fourth day, then lower prices can be expected. If prices gap lower on the fourth day, a trend reversal has been confirmed. If the gap between days 1 and 2 is filled, the pattern is confirmed.
Tagged with: candlestick • candlestick pattern • japanese candlestick • japanese candlestick trading.