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Bearish Candlestick Chart Patterns

  Reversal Patterns Continuation Patterns
 

Abandoned Baby Bearish

Pattern: Reversal
Trend: Bearish
Reliability: High

How to Identify it

  • First day is usually a long white day

  • Second day is a doji that gaps in the direction of the previous trend

  • The third day is a black day, gapping in the opposite direction, with no overlapping shadows

What it Means

In an uptrend, the market builds strength on a long white day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario definitely shows an erosion of confidence in the current trend. Confirmation of the trend reversal is the black third day, which is given extra validation by the downward gap.


 

Dark Cloud Cover Bearish

Pattern: Reversal
Trend: Bearish
Reliability: High

How to Identify it

  • First day is a long white day

  • Second day is black with an open above the high of the previous day

  • Second day closes within but below the midpoint of the first day’s body

What it Means

In an uptrend the market gaps open, but loses ground to fall below the midpoint of the previous day. The Dark Cloud Cover pattern suggests an opportunity for the shorts to capitalize on the next day’s open: a warning sign to bullish investors. The Dark Cloud Cover pattern is the opposite of the Piercing line pattern.


 

Evening Doji Star Bearish

Pattern: Reversal
Trend: Bearish
Reliability: High

How to Identify it

  • First day is a long white day

  • Second day is a doji that gaps in the direction of the previous trend

  • The third day is a black day

What it Means

In an uptrend, the market builds strength on a long white day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario generally shows an erosion of confidence in the current trend. Confirmation of the trend reversal is the black third day. The Evening Doji Star indicator is the fully realized bearish Doji Star pattern.


 

Evening Star Bearish

Pattern: Reversal
Trend: Bearish
Reliability: High

How to Identify it

  • First day is a long white day

  • Second day is a small day that gaps in the direction of the previous trend

  • The third day is a black day

What it Means

In an uptrend, the market builds strength on a long white day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario generally shows an erosion of confidence in the current trend. Confirmation of the trend reversal is the black third day.


 

Identical Three Crows Bearish

Pattern: Reversal
Trend: Bearish
Reliability: High

How to Identify it

  • Three black days occur, each with a close below the previous day

  • Each day opens at the close of the previous day

What it Means

In an uptrend three long black days occur that open at the previous day’s close. This pattern is similar to the Three Black Crows pattern but typifies a more severe loss of buying power. A bearish trend is almost certain.


 

Kicking Bearish

Pattern: Reversal
Trend: Bearish
Reliability: High

How to Identify it

  • The first day is a White Marubuzo day

  • The second day is a Black Marubuzo day that gaps downward

What it Means

This pattern is a strong sign that the market is headed downward. With this indicator, the previous market direction is not as important as with other indicators.


 

Three Black Crows Bearish

Pattern: Reversal
Trend: Bearish
Reliability: High

How to Identify it

  • Three black days occur, each with a close below the previous day

  • Each day opens within the body of the previous day

  • Each day closes near or at its lows

What it Means

In an uptrend three long black days occur with consecutively lower closes. This pattern suggests that the market has been at a high price for too long, and investors are beginning to compensate for it.


 

Three Inside Down Bearish

Pattern: Reversal
Trend: Bearish
Reliability: High

How to Identify it

  • A bearish Harami pattern occurs in the first two days

  • The third day is a black day with a lower close than the second day

What it Means

This pattern is a more reliable addition to the standard Harami pattern. The third day is confirmation of the bearish trend reversal.


 

Three Outside Down Bearish

Pattern: Reversal
Trend: Bearish
Reliability: High

How to Identify it

  • A bearish Engulfing pattern occurs in the first two days

  • The third day is a black day with a lower close than the second day

What it Means

This pattern is a more reliable addition to the standard Engulfing pattern. The third day is confirmation of the bearish trend reversal.


 

Upside Gap Two Crows Bearish

Pattern: Reversal
Trend: Bearish
Reliability: High

How to Identify it

  • The first day is a long white day continuing in an uptrend

  • The second day is black and gaps up

  • The third day is also black and engulfs the previous black day, but still closes above the first day

What it Means

In an uptrend the market falters, but still closes above the previous day’s close. The next day, it falters more but remains above the first day’s close. This is a signal that the market can no longer hold its position and is in for a bearish ride.


  Dark-Cloud  Cover Bearish

 

Pattern: Reversal
Trend: Bearish
Reliability: High


What it Means                                                   

A Bearish Top in the Stock.  In an uptrend a long clear candlestick Followed by filled candlestick that opens above the previous days high.  The Stock then Closes well into the clear candlestick's real body.  This can indicate the start of a major downtrend.


 

Advance Block Bearish

Pattern: Reversal
Trend: Bearish
Reliability: Moderate

How to Identify it

  • Three long white days occur, each with a higher close than the previous day

  • Each day opens within the body of the previous day and closes near the high of the day

  • Each days body is significantly smaller than the previous days body

  • The second and third days should exhibit long upper shadows

What it Means

In a downtrend three long days occur with consecutively higher closes. This pattern is similar to the Three White Soldiers pattern, however, in this case, each successive day is weaker than the one preceding it. This suggests that the previous rally is losing strength, and preparing for a reversal.


 

Breakaway Bearish

Pattern: Reversal
Trend: Bearish
Reliability: Moderate

How to Identify it

  • The first day is a long white day

  • The second day is a white day that gaps above the first day

  • The third and fourth days continue to in the direction of the second with higher consecutive closes

  • The fifth day is a long black day that closes into the gap between the first and second days

What it Means

An uptrend sees a bullish surge that eventually weakens. The result is a long black day that does not close the gap into the body of the first day. This suggests a short-term reversal.


 

Deliberation Bearish

Pattern: Reversal
Trend: Bearish
Reliability: Moderate

How to Identify it

  • Two long white days occur, the second with a higher close than the first

  • A third white day is a spinning top or doji that gaps above the second day

What it Means

In an uptrend three white days occur with consecutively higher closes. This pattern is a derivative of the Three White Soldiers pattern and is very similar to the Advance Block pattern. Even though an uptrend continues, the small third body suggests that the previous rally is losing strength and preparing for a reversal.


 

Doji Star Bearish

Pattern: Reversal
Trend: Bearish
Reliability: Moderate

How to Identify it

  • First day is a long white day

  • Second day is a doji that gaps in the direction of the previous trend

  • The shadows of the doji should not be long

What it Means

In an uptrend, the market builds strength on a long white day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario generally shows erosion of confidence in the current trend. Confirmation of a trend reversal would be a lower open on the next trading day.


 

Engulfing Bearish

Pattern: Reversal
Trend: Bearish
Reliability: Moderate

How to Identify it

  • A long white day occurs

  • The second day is a black day that completely engulfs the real body of the first day

What it Means

Occurring in an uptrend, the Engulfing depicts an opening at a new high, followed by a high volume sell-off that closes at or below the previous day’s open. This signifies that the uptrend has been hurt and the bears may be gaining strength. The Engulfing indicator is also the first two days of the Three Outside patterns.


 

Meeting Lines Bearish

Pattern: Reversal
Trend: Bearish
Reliability: Moderate

How to Identify it

  • The first day is a long white day, and has a body that is above the previous trend

  • The second day is a long black day, and has a body that is also above the previous trend.

  • Both days have identical closes

What it Means

In an uptrend two days open above the previous trend. Even though the second day opens high, it rallies to close at the close of the previous day. This typically means a benchmark has be defined by traders, and a reversal is likely. The bearish Meeting Lines pattern is similar to, but less reliable than the Dark Cloud Cover pattern.


 

Meeting Lines Bearish

Pattern: Reversal
Trend: Bearish
Reliability: Moderate

How to Identify it

  • The first day is a long white day, and has a body that is above the previous trend

  • The second day is a long black day, and has a body that is also above the previous trend.

  • Both days have identical closes

What it Means

In an uptrend two days open above the previous trend. Even though the second day opens high, it rallies to close at the close of the previous day. This typically means a benchmark has be defined by traders, and a reversal is likely. The bearish Meeting Lines pattern is similar to, but less reliable than the Dark Cloud Cover pattern.


 

Harami Cross Bearish

Pattern: Reversal
Trend: Bearish
Reliability: Moderate

How to Identify it

  • A long white day occurs

  • The second day is a doji that is within the range of the previous day’s real body

What it Means

After a long white day at the high end of an uptrend, the market opens lower than the previous day’s close. Trading is typically light and the day ends with a close at the same price as the open and within body of the first day; an even stronger signal than the basic Harami pattern that the current uptrend is losing strength.


 

Tri Star Bearish

Pattern: Reversal
Trend: Bearish
Reliability: Moderate

How to Identify it

  • A doji occurs on three consecutive trading days

  • The second doji gaps above the first and third

What it Means

In an long uptrend, the market shows signs of weakness as the real bodies have grown progressively smaller. The trend culminates with the Tri Star, identifying that there is little strength left, and signaling a return of the bears.


 

Two Crows Bearish

Pattern: Reversal
Trend: Bearish
Reliability: Moderate

How to Identify it

  • The first day is a long white day

  • The second day is a black day that gaps above the first day

  • The third day is a black day that opens within the body of the second day and closes within the body of the first day

What it Means

In an uptrend the market closes lower after an opening gap upwards. This is followed by another black day which fills the gap. The Two Crows pattern suggests the erosion of the uptrend, and foreshadows a trend reversal.


 

Hanging Man / Dragonfly Doji Bearish

Pattern: Reversal
Trend: Bearish
Reliability: Low/Moderate

How to Identify it

  • Small real body at the upper end of the trading range

  • Lower shadow at least twice as long as the real body

  • No (or almost no) upper shadow

What it Means

There is a sharp sell off after the market opens during an uptrend. However, by the end of the trading day, the market closes at or near its high for the day. This signifies the potential for further sell-offs. Since the certainty for a Hanging Man indicator is low, the trend reversal can be confirmed by a black candlestick or a large down gap on the next trading day accompanied by a lower close. If the open and the close are identical, the indicator is considered a Dragonfly Doji. The Dragonfly Doji has a higher reliability associated with it than a Hanging Man.


 

Shooting Star / Gravestone Doji Bearish

Pattern: Reversal
Trend: Bearish
Reliability: Low/Moderate

How to Identify it

  • Small real body at the upper end of the trading range

  • Prices gap open

  • Upper shadow usually at least three times as long as the real body

  • No (or almost no) lower shadow

What it Means

The market gaps open above the previous day’s close in an uptrend. It rallies to a new high then loses strength and closes near its low: a bearish change of momentum. Confirmation of the trend reversal would by an opening below the body of the Shooting Star on the next trading day. If the open and the close are identical, the indicator is considered a Gravestone Doji. The Gravestone Doji has a higher reliability associated with it than a Shooting Star.


 

Hanging Man / Dragonfly Doji Bearish

Pattern: Reversal
Trend: Bearish
Reliability: Low/Moderate

How to Identify it

  • Small real body at the upper end of the trading range

  • Lower shadow at least twice as long as the real body

  • No (or almost no) upper shadow

What it Means

There is a sharp sell off after the market opens during an uptrend. However, by the end of the trading day, the market closes at or near its high for the day. This signifies the potential for further sell-offs. Since the certainty for a Hanging Man indicator is low, the trend reversal can be confirmed by a black candlestick or a large down gap on the next trading day accompanied by a lower close. If the open and the close are identical, the indicator is considered a Dragonfly Doji. The Dragonfly Doji has a higher reliability associated with it than a Hanging Man.


 

Shooting Star / Gravestone Doji Bearish

Pattern: Reversal
Trend: Bearish
Reliability: Low/Moderate

How to Identify it

  • Small real body at the upper end of the trading range

  • Prices gap open

  • Upper shadow usually at least three times as long as the real body

  • No (or almost no) lower shadow

What it Means

The market gaps open above the previous day’s close in an uptrend. It rallies to a new high then loses strength and closes near its low: a bearish change of momentum. Confirmation of the trend reversal would by an opening below the body of the Shooting Star on the next trading day. If the open and the close are identical, the indicator is considered a Gravestone Doji. The Gravestone Doji has a higher reliability associated with it than a Shooting Star.


 

Belt Hold Bearish

Pattern: Reversal
Trend: Bearish
Reliability: Low

How to Identify it

  • A black body occurs in an uptrend with no upper shadow

What it Means

In an uptrend, a black body occurs with an open that is also the high for the day. This may cause many positions to be sold, perpetuating a bearish reversal.


 

Harami Bearish

Pattern: Reversal
Trend: Bearish
Reliability: Low

How to Identify it

  • A long white day occurs

  • The second day is a black day that is completely engulfed by the real body of the first day

What it Means

After a long white day at the high end of an uptrend, a black candlestick opens lower than the previous day’s close. Trading is typically light and the day ends with a close lower than the open and within body of the first day; a signal that the current uptrend is losing strength. The Harami indicator should be confirmed with the next trading day’s candlestick following the reversal trend. The Harami pattern is also the first two days of the Three Inside patterns.


      

Continuation Patterns


 

Falling Three Methods Bearish

Pattern: Continuation
Trend: Bearish
Reliability: High

How to Identify it

  • The first day is a long black day

  • The second, third, and fourth days have small real bodies and follow a brief uptrend pattern, but stay within the range of the first day

  • The fifth day is a long black day that closes below the close of the first day

What it Means

In a downtrend, a long black day occurs, following by three days of small real bodies that fall into a short uptrend. On the fifth day, the bears come in strong to close at a new low. This small uptrend, in between two long black days, is consistent with investors taking a break. The downward should continue.


 

Downside Gap Three Methods Bearish

Pattern: Continuation
Trend: Bearish
Reliability: Moderate

How to Identify it

  • Two long black days occur with a gap between them

  • The third day is a white day that fills the gap between the first two days

What it Means

A downtrend is followed by two long black days with a gap downward between them. The third day is a white day, but one that closes the gap between the first two. This should be seen as support for the downward trend.


 

Downside Tasuki Gap Bearish

Pattern: Continuation
Trend: Bearish
Reliability: Moderate

How to Identify it

  • The first two days are black days with an opening gap

  • The third day is a white day that opens within the body of the second day and closes within the gap of the first two days

What it Means

In a downtrend a black day occurs, followed by another black day that gaps down. A white day ensues, and is likely the result of investors temporarily taking advantage of the low buying price. The trend should continue to follow the direction of the downward gap.


 

On Neck Bearish

Pattern: Continuation
Trend: Bearish
Reliability: Moderate

How to Identify it

  • The first day is a long black day

  • The second is a white day (not long) that opens below the low of the previous day and closes at the low of the previous day

What it Means

The On Neck pattern is typical in a downtrend. The fact that a small rally is built by the second day, but ends at the low of the previous black day indicates that the bears should prevail.


 

In Neck Bearish

Pattern: Continuation
Trend: Bearish
Reliability: Moderate

How to Identify it

  • The first day is a long black day

  • The second is a white day that opens below the low of the previous day and closes barely above or equal to the close of the previous day

What it Means

The In Neck pattern is a less severe relative of the On Neck pattern. A small rally is built by the second day, but ends near the close of the previous black day. Although, as in the case of the On Neck pattern, the downtrend should prevail, it may take longer to evolve.


 

Side-by-Side White Lines Bearish

Pattern: Continuation
Trend: Bearish
Reliability: Moderate

How to Identify it

  • The first day is a black day

  • The second day is a white day that gaps down

  • The third day is a white day of about the same body length and close as the second day

What it Means

In a downtrend a black day is followed by two white that are gapped below the first day. This typically means the shorts are covering their positions, and no reversal is about to occur. The downtrend should remain intact for the near future.


 

Separating Lines Bearish

Pattern: Continuation
Trend: Bearish
Reliability: Low

How to Identify it

  • The first day is a white day

  • The second day is a black day that has the same opening price as the first day

What it Means

In downtrend a long white day occurs. The second day, however, picks up where the previous day’s trading left off and rallies to close lower. This suggests that the downtrend should remain intact.


 

Three-Line Strike Bearish

Pattern: Continuation
Trend: Bearish
Reliability: Low

How to Identify it

  • Three long black days occur with consecutively lower closes

  • The fourth day opens lower, but closes above the open of the first day

What it Means

The white day drives prices back to where they were at the start of the pattern. If the bearish trend was strong before the pattern, then it should continue.


 

Thrusting Bearish

Pattern: Continuation
Trend: Bearish
Reliability: Low

How to Identify it

  • The first day is a long black day

  • The second is a white day that opens below the low of the previous day and closes into the body of the previous day, but below the midpoint

What it Means

The Thrusting pattern is a weaker relative of the On Neck and In Neck continuation patterns. A rally is built by the second day, and closes well into the body of the previous black day. However, since the second day’s close doesn’t even reach the midpoint of the first day’s body, the bulls will likely be discouraged and the downtrend will continue.

 

 


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Disclaimer: This material is for your private information. We are not soliciting any action based upon it. Opinions expressed are present opinions only. The material is based upon information considered reliable, but we do not represent that is accurate or complete, and it should not be relied upon as such. We, or persons involved in the preparation or issuance of this material may, from time to time, have long or short positions in, and buy or sell the securities or options of companies mentioned herein.

 

 


MasterDATA - the only source for Index and ETF composite / breadth historical data, charts and reports - Home


www.masterdata.com
support@masterdata.com


SEO by MasterMedia

Disclaimer: This material is for your private information. We are not soliciting any action based upon it. Opinions expressed are present opinions only. The material is based upon information considered reliable, but we do not represent that is accurate or complete, and it should not be relied upon as such. We, or persons involved in the preparation or issuance of this material may, from time to time, have long or short positions in, and buy or sell the securities or options of companies mentioned herein.

 

 


MasterDATA - the only source for Index and ETF composite / breadth historical data, charts and reports - Home


www.masterdata.com
support@masterdata.com


SEO by MasterMedia

Disclaimer: This material is for your private information. We are not soliciting any action based upon it. Opinions expressed are present opinions only. The material is based upon information considered reliable, but we do not represent that is accurate or complete, and it should not be relied upon as such. We, or persons involved in the preparation or issuance of this material may, from time to time, have long or short positions in, and buy or sell the securities or options of companies mentioned herein.