BEARISH
SEPERATING LINES
| Type: | Continuation |
| Relevance: | Bearish |
| Prior Trend: | Bearish |
| Reliability: | Low |
| Confirmation: | Required |
| No. of Sticks: | 2 |
Definition:
This pattern is characterized by a white candlestick in a downtrend, which is followed by a sharply lower gap when market opens next day and shows an opening price equal to the prior day’s opening price and also a lower closing price, which is a Black Opening Marubozu.
Recognition Criteria:
1. The market is characterized by downtrend.
2. We see a long white candlestick in the first day.
3. Then we see a black body, which has the same opening price as the first day, or extremely close to it.
4. The second day candlestick is a Black Opening Marubozu.
Explanation: A white real body (especially a relatively long one) is a matter of concern for the shorts during downtrend. It shows that the bulls may be gaining control. However, if the next day opens with a downward gap and an opening price equal to the previous day’s opening price, this reinstates the bear confidence. If furthermore the day closes lower, bears feel even more confident about the fact that the downtrend will continue.
Important Factors:
The black candlestick must be a Black Opening Marubozu.
A confirmation on the third day is required to justify that the downtrend is still strong. The confirmation may be in the form of a black candlestick, a large gap down or a lower close on the third day.
This pattern is characterized by a white candlestick in a downtrend, which is followed by a sharply lower gap when market opens next day and shows an opening price equal to the prior day’s opening price and also a lower closing price, which is a Black Opening Marubozu.
Recognition Criteria:
1. The market is characterized by downtrend.
2. We see a long white candlestick in the first day.
3. Then we see a black body, which has the same opening price as the first day, or extremely close to it.
4. The second day candlestick is a Black Opening Marubozu.
Explanation: A white real body (especially a relatively long one) is a matter of concern for the shorts during downtrend. It shows that the bulls may be gaining control. However, if the next day opens with a downward gap and an opening price equal to the previous day’s opening price, this reinstates the bear confidence. If furthermore the day closes lower, bears feel even more confident about the fact that the downtrend will continue.
Important Factors:
The black candlestick must be a Black Opening Marubozu.
A confirmation on the third day is required to justify that the downtrend is still strong. The confirmation may be in the form of a black candlestick, a large gap down or a lower close on the third day.
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